(Adds analyst comment, updates prices, changes dateline)

By Eric Onstad

LONDON, June 10 (Reuters) - Copper prices lost ground on

Tuesday as many investors shunned the market due to uncertainty

about U.S.-China trade talks and how the ongoing trade war

between the world's two largest economies will hit economic

growth and metals demand.

Benchmark three-month copper on the London Metal Exchange

was down 0.3% at $9,767 per metric ton by 1000 GMT,

having recovered by 20% since hitting its lowest since November

2023 in April.

"We have a lot of market complacency right now. Volatility

seems to be drifting lower across markets even though we have

yet to see any breakthrough on trade talks with China," said Ole

Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Top U.S. and Chinese officials will resume trade talks for a

second day in London on Tuesday, hoping to secure a breakthrough

over export controls for rare earths and other goods.

More copper inventories departed from LME-registered

warehouses as traders took advantage of higher U.S. prices due

to expectations that U.S. President Donald Trump will impose

tariffs on the metal, following duties levied on aluminium and

steel.

LME copper stocks eroded by another 2,000

tons to 120,400, data showed on Tuesday, having tumbled by half

over the past three months.

U.S. Comex copper futures dropped 0.8% to $4.89 a lb,

bringing the premium of Comex over the LME to $1,000 a ton.

"The appetite is failing somewhat, especially in the New

York market, because the tariff announcement will be a binary

event and some fireworks can probably not be avoided once you

get that news out."

Traders are awaiting the outcome of an investigation Trump

ordered in February on potential import tariffs on copper.

In China, zinc on the Shanghai Futures Exchange

softened for a third trading day, losing 1.3% to 21,845 yuan a

ton, the lowest since late April.

"China's domestic demand has shown signs of weakening

recently, and buyers have been procuring to meet their immediate

needs at lower prices," Shanghai-based commodity market research

house SHMET said.

Among other LME metals, aluminium dipped 0.1% to

$2,477 a metric ton, nickel ceded 0.7% to $15,310, zinc

ceded 0.1% to $2,648, lead fell 0.4% to

$1,978.50, while tin was up 0.1% at $32,750.

($1 = 7.1871 Chinese yuan)