Jan 06, 2012 NEW YORK (Dow Jones)--Copper futures edged higher on Friday after a session of indecisive trading as investors weighed a better-than-expected unemployment report in the U.S. against ongoing worries about Europe's financial system.
The most actively traded copper contract, for March delivery, rose 0.85 cent, or 0.3%, to settle at $3.435 a pound on the Comex division of the New York Mercantile Exchange.
Futures were nearly flat on the week, shedding a tenth of a cent this week, as worries about the chance of a euro-zone financial crisis countered the boost from upbeat economic readings from the U.S. and China.
Copper is sensitive to the economic outlook because of its widespread uses in everything from plumbing and wiring to cars and trucks. Prices have been under pressure for months on the chance that Europe's debt crisis could weaken the industrial economy.
Friday's gains came as the U.S. Labor Department reported the U.S. economy added more jobs than economists had expected in December, and the unemployment rate dropped to its lowest level since February 2009. Copper's demand outlook was also lifted this week as China's official purchasing manager's index showed the country's manufacturing sector returned to growth in December.
But the outlook for the industrial metal is unclear, with investors still focused on the high borrowing costs that threaten some of Europe's largest economies.
"Next week's big question is Italian debt, Spanish debt," said Frank Lesh, a broker with FuturePath Trading in Chicago.
Deutsche Bank on Friday cut its 2012 copper-price forecast by 19% to $7,350 a metric ton, or $3.33 a pound, citing a cloudy economic outlook and the potential for gains in the dollar.
A rising dollar can hit copper and other dollar-denominated commodities by making them appear more expensive for potential buyers using other currencies. On Friday, the ICE US Dollar Index touched its highest levels in more than one year.
"We expect that near-term deflationary fears from the worsening economic picture in Europe and intensifying hard landing fears in China may continue to depress pricing" for metals, the bank said.
Copper settlements (ranges include electronic and pit trading):
Jan $3.4310; up 0.85 cent; Range $3.3935-$3.4375
Mar $3.4350; up 0.85 cent; Range $3.3935-$3.4650