Chinese move knocks copper; gold, silver glitter

* Copper slips on Chinese move against inflation

 * Oil also off but Mideast tension lends support

 * Gold hits 5-week high, silver strongest in 31 years

 * Cocoa rises on Ivorian bank turmoil, coffee strong

 By Eric Onstad

 LONDON, Feb 18 (Reuters) - A fresh move by China to curb
inflation undermined copper and oil prices on Friday while a
battle over control of banks in Ivory Coast sent cocoa to a
one-year peak and Mideast unrest boosted gold and silver.

 The news that China's central bank raised lenders' required
reserves by 50 basis points sent a chill through some markets as
investors worried that more monetary tightening would cut demand
in the world's biggest consumer of commodities.

 Markets sought to balance Chinese moves to cool the economy
-- including a rate hike earlier this month -- with strong
underlying fundamentals in copper, including an expected
shortage of metal to meet global demand this year.

 "The Chinese move this morning to raise the reserve ratio is
a continuation of policy tightening that we expect will persist
for some time yet," said Nic Brown, analyst at Natixis in
London.

 "There is potential for base metal prices to correct lower
soon. Tin, copper, nickel are more susceptible to this
correction compared with other metals. We don't see a collapse
but a correction... fundamentals are still positive."

 In the wake of the news from China, benchmark copper on the
 London Metal Exchange dipped 0.5 percent to $9,763 a tonne by
1130 GMT. The metal used in power and construction hit a record
peak of $10,190 earlier this week.

 The Chinese move also dampened sentiment on oil markets,
although continued tensions in the Middle East and North Africa
were a counter-balance, having helped lift Brent crude above
$100 a barrel about two weeks ago.

  Brent crude futures were up 10 cents at $102.69 a barrel,
down from earlier gains to $103.50 a barrel. The U.S. March
light crude contract shed 28 cents to $86.08.

 GOLD, SILVER STRONG

 The persistent unrest in the Middle East boosted safe-haven
gold to a five-week peak and sister metal silver skipped to the
highest levels in 31 years.

  "(There has been) a remarkable move in silver, which has
helped gold back towards $1,400," said Saxo Bank senior manager
Ole  Hansen. 

 "Middle East/North African unrest was undoubtedly the
trigger, but it looks like investors have been waiting for the
opportunity to buy at lower levels, and once that opportunity
disappeared they returned for fear of missing the move." 

 Gold fell more than 6 percent in January, but many investors
had been waiting for further losses to re-enter the market.

 Spot gold gained to $1,385.70 against $1,383.30 late in New
York on Wednesday, while silver climbed to $31.84 against
$31.74, having hit a high of $31.95, a 31-year peak in earlier
trade. 

 COCOA UP ON IVORIAN BANK TURMOIL

 Cocoa futures broke through a one-year barrier after
incumbant leader Laurent Gbagbo of Ivory Coast, the world's
biggest cocoa producer, decreed that major banks suspending
business would be nationalised. 

 ICE May cocoa traded up $24 or 0.7 percent at $3,462 a tonne
after touching $3,470, its highest since Jan. 22, 2010.

 Arabica coffee futures climbed to their highest level in
nearly 14 years, and robusta coffee hit a new 2-1/2-year peak as
roasters were forced to pay up as high quality beans remained in
short supply.
 (Reporting by Eric Onstad, editing by Anthony Barker)

(Source: http://af.reuters.com/article/commoditiesNews/idAFLDE71H0ZJ20110218)