(Replaces analyst comment; updates prices) BEIJING, Jan 26 (Reuters) - Base metal prices on Friday edged down from near multi-year peaks after U.S. President Donald Trump backed a stronger dollar, prompting the currency to trade above its recent lows. A stronger dollar makes metals more expensive for holders of other currencies. The greenback's recent weakness saw lead on the London Metal Exchange touch $2,653 a tonne on Thursday, highest since August 2011, while zinc hit a decade high of $3,481.50, and nickel its highest since May 2015. Trump's comments on the U.S. currency contradicted U.S. Treasury Secretary Steven Mnuchin's earlier endorsement of a weak dollar. "As far as the metals are concerned it would seem that the mainly Mnuchin-inspired reason for the rally has been if not reversed certainly modified and as a result the ever-nervous markets lost and may yet lose further ground," Malcolm Freeman, CEO of Kingdom Futures, wrote in a note on Friday. FUNDAMENTALS * LME COPPER: Three-month copper on the LME was flat at $7,139 a tonne at 0800 GMT, recovering from a 0.3 dip earlier in the session. Copper is set for a weekly rise of 1.3 percent. * SHFE COPPER: The most-traded March copper contract on the Shanghai Futures Exchange closed down 0.2 percent at 53,430 yuan ($8,448.77) a tonne. * SHFE METALS: "The previous day's bounce was too sudden. After the prices rose, there are not many people looking to buy high," says Xu Maili, director of non-ferrous metal research at Everbright Futures in Shanghai. * SHFE INVENTORIES: Copper inventories in warehouses monitored by the ShFE fell 6.8 percent week-on-week, the exchange said on Friday, while aluminium stocks rose to another record high and ever-tight lead stocks shrank. * NICKEL: Nickel was the sole gainer among base metals, nudging up 0.2 percent in London, and climbing 1.1 percent in Shanghai, where it has clocked a weekly gain of 7.8 percent on positive demand prospects in China. * FREEPORT: Freeport-McMoRan Inc said it was edging closer to a permit deal with Indonesia for its massive Grasberg mine, but the world's second-biggest copper producer cautioned that it has not yet struck any formal agreements. * COLUMN: What does looming U.S.-China trade showdown mean for aluminium? * For the top stories in metals and other news, click or PRICES BASE METALS PRICES 0800 GMT Three month LME copper 7136 Most active ShFE copper 53430 Three month LME aluminium 2230.5 Most active ShFE aluminium 14625 Three month LME zinc 3455 Most active ShFE zinc 26180 Three month LME lead 2598.5 Most active ShFE lead 19470 Three month LME nickel 13800 Most active ShFE nickel 104340 Three month LME tin 21230 Most active ShFE tin 147040 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 794.68 LME/SHFE ALUMINIUM LMESHFALc3 -1748.26 LME/SHFE ZINC LMESHFZNc3 324.08 LME/SHFE LEAD LMESHFPBc3 -327.02 LME/SHFE NICKEL LMESHFNIc3 1052.13 ($1 = 6.3240 Chinese yuan) (Reporting by Tom Daly; Editing by Joseph Radford and Tom Hogue)