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Volatile copper climbed on Friday, as investors manoeuvred ahead of jobs data from the United States, while lingering concerns over European sovereign debt and demand in top consumer China capped gains.

By 0936 GMT, copper for three month delivery on the London Metal Exchange traded at $6,600 (U.S.) a tonne from $6,525 on Thursday and compared with a session high at $6,620.

"Given that it is these broader macro themes that are driving prices, you could see metals move aggressively on the back of that (jobs data)," said Gayle Berry, an analyst at Barclays Capital.

U.S. nonfarm payrolls likely rose at their fastest pace in nearly 27 years in May as the government ramped up hiring for the census and businesses grew more optimistic about the economy, a Reuters survey showed.

In addition to offering clues on the health of the world's largest economy, the data could boost the dollar and make metals priced in the U.S. unit more expensive for holders of other currencies.

On Thursday, copper, used in power and construction, fell to a two-week low at $6,477.50 a tonne on worries over European sovereign debt and the pace of economic growth in China.

"The fundamental backdrop is still supportive but undefined fears have been taking prices lower... we know of sovereign debt concerns and China slowdown but overall the market has become spooked," said Ms. Berry.

Data earlier this week pointed to a slowdown in the pace of manufacturing activity in China, the world's top metals consumer, as gradual monetary policy tightening took a toll on new orders.

Chinese buying of industrial metal helped push copper prices 140 per cent higher last year.

"China's economic growth has shifted into a lower gear following a very strong period in Q4-2009 and Q1-2010," said Standard Chartered in a note. "We expect China to slow over the next six months, but not dramatically.

"We are still looking for 10 per cent GDP growth for 2010, but we have reduced our 2011 growth forecast to 8 per cent from 9 per cent to reflect the expected slowdown in real-estate construction."

FUNDAMENTALS IMPROVING

Falling LME inventories are often a sign of improving demand and helped boost sentiment on Friday.

Copper stocks fell 1,300 tonnes to 473,000 tonnes - their lowest level since late December - and have now fallen from six and a half year highs at 555,075 tonnes hit in mid February.

Aluminium traded at $1,990 versus $1,955. LME stocks for the metal, used in transport and packaging, shed 9,075 tonnes to 4.53 million tonnes.

A large portion of those aluminum stocks are tied up in finance deals, to release cash for producers and to earn banks higher returns than they would get in money markets.

Steel making ingredient nickel traded at $18,670 from $18,700 while battery material lead was at $1,665.75 from $1,645.

Recent rises in cancelled warrants - material earmarked for delivery from warehouses - are being watched by investors.

On Thursday, lead cancelled warrants were at 14,550 tonnes from 6,975 tonnes the day before. LME lead stocks however, remain at highs not seen since October 2002 at 191,925 tonnes.

"We have seen the cancelled warrants for lead increase over the past few days," added Barclays' Ms. Berry. "It wouldn't surprise me if we're seeing a pick-up in demand ahead of the summer.

"The peak periods for lead demand usually are summer and winter, with extremities of weather and when batteries fail."

Zinc traded at $1,741 a tonne from $1,740 and tin was at $17,310 from $17,650.

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