Sep 29, 2011 NEW YORK (Dow Jones)--Copper futures bounced off their earlier lows Thursday as a pair of readings on the U.S. economy came in better than expected, but held slight losses as gloom about a potential slowdown in metals demand continued to weigh on the market.
The most actively traded copper contract, for December delivery, fell 0.7 cent, or 0.2%, to $3.2395 a pound on the Comex division of the New York Mercantile Exchange. Futures earlier fell as low as $3.08 a pound, a fresh low for 2011 as the selling pressure that has rattled the market this month continued.
But copper clawed its way toward positive territory after separate reports on U.S. unemployment and growth eased worries about the demand outlook for the second-largest copper-consuming country.
The beleaguered U.S. labor market showed an unexpected improvement last week. Initial jobless claims fell by 37,000 to 391,000 during the week ended Sept. 24, the Labor Department said. Analysts had expected a decline of only 3,000 claims.
Also Thursday, the Commerce Department said the U.S. economy expanded more than previously thought in the second quarter. Gross domestic product grew at a rate of 1.3% from April to June, higher than the 1% growth estimate reported last month, and slightly more than economists' expectations for a revision to 1.2%.
Worries that government and central bank leaders would be unable to stop a renewed global recession have pushed copper prices sharply lower since August, as investors cut their outlook for growth. Copper is sensitive to the economic outlook because of its widespread use across industries.
Futures were also supported Thursday as Germany's parliament approved a previously announced expansion of the euro-zone's rescue fund, easing concerns that the currency union would fail to take decisive steps to stem the sovereign debt crisis there.
But despite the positive developments, copper may not be finished with its recent declines, analysts said.
"The potential for further downside in prices looks like the more likely direction in the short-term until policymakers take enough action to satisfy market concerns," Barclays Capital analyst Gayle Berry said in a note.