Adds analyst comment and dateline, updates prices

By Eric Onstad

LONDON, May 28 (Reuters) - Copper edged higher on Thursday following news of fresh efforts by top metals consumer China to boost its economy, but investors were wary after an escalation in the Middle East conflict.

Three-month copper on the London Metal Exchange CMCU3 added 0.4% to $13,582 a metric ton by 0930 GMT after slipping to its lowest level since May 21 at $13,464.

Sources told Reuters that China's central bank has instructed banks to boost lending this month, underscoring Beijing's continued efforts to support an economy squeezed by higher energy costs and stubbornly weak domestic demand.

Oil prices rose and stocks retreated after a fresh U.S. military strike on Iran dented investor confidence that the two sides will be able to hammer out a peace deal. MKTS/GLOB

"Copper is under pressure alongside the broader base metals complex, as geopolitical uncertainty dents macro sentiment," said Ewa Manthey, commodities strategist at ING.

Investors are seeking to balance the potential of weaker metals demand as the conflict cuts economic growth against the prospect of copper shortages due to the lack of sulphuric acid.

U.S. Comex copper futures HGc3 dipped 0.1% to $6.37 a lb, bringing the premium of Comex over LME copper to 3.2% or $444 a ton.

Traders have been steadily shipping copper to the U.S. ahead of a decision expected at the end of June about whether to impose tariffs on refined copper.

"Tariff expectations are once again pulling metal into the U.S., tightening availability elsewhere and adding another layer of distortion to the market," Manthey said.

The U.S. dollar index .DXY climbed to a one-week high, making greenback-priced commodities more expensive for buyers using other currencies. USD/

LME lead CMPB3 fell 0.6% to $1,994 a ton after LME inventory data on Thursday showed inflows of nearly 30,000 tons of metal into warehouses in Taiwan. MPBSTX-TOTAL

LME aluminium CMAL3 shed 0.4% to $3,623 a ton and nickel CMNI3 dipped 0.1% to $18,920 while zinc CMZN3 added 0.1% to $3,515 and tin CMSN3 rose 0.6% to $54,720.