Feb 29, 2012 NEW YORK (Dow Jones)--Copper futures finished down 1.1% Wednesday on comments by Federal Reserve Chairman Ben Bernanke, who hinted further quantitative easing was not imminent.

The bank chief told Congress "monetary policy is not a panacea," adding the long-term health of the labor market hinged on choices made by Congress and the White House.

Copper for May delivery, the most active contract, fell 4.20 cents, or 1.1% to settle at $3.8795 a pound on the Comex division of the New York Mercantile Exchange.

The contract had traded as high as $3.9615 ahead of Bernanke's comments, but sank to a low of $3.8050 a pound as "Bernanke's testimony to Congress dampened speculation of further QE to help stimulate growth," said Sucden Financial.

Bernanke's comments snuffed out a three-day winning streak for copper futures, which had pushed prices almost 3% higher.

"The perceived change in tone from Bernanke I think is being overplayed here," said Bill O'Neill, a principal with Logic Advisors.

Some market participants had hoped the Fed would open the spigot of cheap money for a third time, embarking on the so-called QE3 program. However, Bernanke's Wednesday comments suggested the option was now off the table.

The comments triggered a sharp decline in both base and precious metals prices. However, while copper futures were down 3% on the day at their lowest point, gold's nadir of $1,708.40 a troy ounce equated to a 4.5% drop.

"The selloff in copper is very temperate given the magnitude of the selloff in gold," said O'Neill.

Earlier in the day, copper looked set to continue its steady march toward $4 a pound on the back of stronger-than-expected U.S. economic growth data and successful efforts by the European Central Bank to inject cheap cash into the region's bank system.

The U.S. gross domestic product, the broadest measure of all the goods and services produced in the economy, grew at an inflation-adjusted annual rate of 3.0% in the October to December period, the Commerce Department said Wednesday. The second estimate of fourth quarter 2011 GDP was stronger than the advance estimate of 2.8% and the best improvement since the second quarter of 2010.

Copper prices are sensitive to economic data as the metal is widely used in manufacturing and construction and an uptick in economic activity tends to translate into stronger demand for the industrial metal.

The ECB lent 800 banks EUR529.53 billion ($712.8 billion), more than the EUR450 billion the market had expected and the EUR489 billion the central bank lent to 523 financial institutions at the first three-year long-term liquidity operation in December.

The ECB's moves steadied the euro and calmed worried about a liquidity crunch, giving copper prices a boost.

Copper settlements (ranges include electronic and pit trading):
May $3.8795; down 4.20 cents; Range $3.8050-$3.9615
Mar $3.8705; down 4.15 cents; Range $3.8000-$3.9525