By Chris Kelly and Melanie Burton NEW YORK/LONDON, Nov 2...

By Chris Kelly and Melanie Burton

NEW YORK/LONDON, Nov 2 (Reuters) - Copper jumped 2 percent on
Wednesday, recovering from two straight days of declines, as
positive jobs market data and a slightly optimistic outlook from
the Federal Reserve bolstered investor risk appetite.
The Fed left interest-rate policy on hold and offered a
moderately brighter economic outlook but flagged risks to growth
that appeared to leave open the door for further easing.
"They raised their assessment of the economy a little bit. The
fact that they didn't do anything ... you could argue as a
positive. The economy seems to crawling along on its own," said
Donald Selkin, chief market strategist with National Securities
Corp in New York.
London Metal Exchange (LME) benchmark copper firmed
$155, or 2 percent, to close at $7,885 per tonne.
In New York, the key December COMEX contract rose 7.85
cents, or 2.24 percent, to settle at $3.5810 per lb, after dealing
between $3.4775 and $3.6295.
Copper found early support from data showing a pickup in
employment in the world's largest economy, which underscored the
view the economy is on a path of slow growth.
"The underlying fundamentals for copper are good; supply data
is weak and demand from China is still robust," said Standard
Chartered analyst Daniel Smith.
"Things look pretty strong for copper for the year-end. Base
metals will keep bouncing around but copper will do better than
other metals because of the fundamentals," he added, underlining
that feedback from customers indicated strong copper demand for
the next couple of months.
Stressing the supply tightness for the metal, Freeport-McMoRan
Copper & Gold Inc said late Tuesday that production and
processing rates at its strike-hit Grasberg mine in Indonesia had
fallen below levels needed to meet fourth-quarter sales targets.
The positive fundamental news helped to offset some of the
worries surrounding the euro zone debt situation.
"The rally overnight is just the market deciding that
yesterday's story about Greece wasn't quite as bad as first feared
because of the intricate politics this involves," said BNP Paribas
analyst Stephen Briggs.
The euro zone debt crisis was, however, still far from being
resolved as Greece's Prime Minister George Papandreou won the
backing of his cabinet on Wednesday to hold a referendum on a 130
billion euro bailout package, a decision that had sent markets
into a tailspin in the previous session.
A business survey showed the European downturn in euro zone
manufacturing in October was deeper than previously reported,
underlining how severely the currency union's debt crisis has
choked new factory orders.CHINA GROWTH
Demand for refined metal in top copper consumer China is
expected to grow 6.4 percent in 2012, a slowdown from this year's
8.5 percent growth rate, a senior analyst at state-backed research
firm Antaike said on Wednesday.
Real consumption of refined copper may rise to 7.85 million
tonnes in 2012 from 7.38 million tonnes expected in this year,
Yang Changhua said.
China is the world's largest consumer of base metals,
accounting for almost 40 percent of copper demand last year.
"China's demand may be somewhat weaker in 2012 but it will
sustain global demand for commodities," said Caroline Bain,
commodities analyst with Economist Intelligence Unit (EIU). EIU
expects China to begin relaxing monetary policy early next year.
"China is believed to have run down stocks of base metals in
2011, which coupled with markedly lower global prices, could spark
a rush of Chinese buying in early 2012," she said in a note.
Also supporting copper prices was another draw from
LME-registered stocks, which have fallen about 10 percent in the
last month.