Dollar strengthens broadly, equities slide on data
* U.S. jobs data comes in far worse than expected

Copper closed lower on Thursday, as the dollar strengthened and grim U.S. and European data underlined concerns that global economic recovery could be a long way off.

Copper for September delivery on the New York Mercantile Exchange's COMEX division settled down 2.50 cents at $2.3055 per lb.

Copper for three month delivery on the London Metal Exchange sank $55 to close at $5,035 a tonne.

Sentiment took a hit after data showed U.S. employers cut 467,000 jobs in June, 100,000 more than expected, with the unemployment rate rising to 9.5 percent.

"When you have these continued weak employment reports, yes, they show maybe we are bottoming out, but there is no turn in any of the data," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

Additional weight was seen from the European Central Bank's decision to hold rates at 1 percent and a warning from its chief that weak economic activity would hamper growth and gradual recovery would only emerge by mid-2010.

"Following non-farm payrolls and comments from the ECB we've seen the dollar strengthen and that's seen most commodity prices under pressure," said John Reade, analyst at UBS.

Also hurting sentiment were figures showing euro zone unemployment hit its highest in 10 years in May. European and U.S. equities tumbled after the data.

Copper recovered a portion of its losses with the help of forecast-beating data that showed new orders for U.S. manufactured goods jump 1.2 percent in May to their largest increase in nearly a year.

SUMMER LULL

But analysts warn economic recovery is not yet within reach.

"If data continues to come out very negative, we could go down to $4,600. I wouldn't be shocked if we went down to $4,300," Andrey Kryuchenkov, analyst at London's VTB Capital said of copper.

"It is bad," he said of Thursday's earlier data. "But sentiment is so much better compared to in January or February."

Copper, used in power and construction, has risen about 60 percent this year, boosted by Chinese stockpiling. But Chinese buying appears to be fading and, as the summer lull sets in, analysts expect base metals to weaken in coming months.

"If you take China out of the buying side of the market, you wouldn't have a lot there. It's going to be difficult for the market to break out of the current trading range in the third quarter because of the fact that we don't really see the kind of demand outside of china that the market needs to extend these levels," LOGIC Advisors' O'Neill said.

Pockets of better data recently has spurred faint optimism among investors. Copper surged on Wednesday to $5,187.50 a tonne in London and $2.3690 a lb in New York -- both 2-1/2-week highs -- in response to upbeat manufacturing surveys in the United States, Europe and China.

A weaker dollar has helped base metals in recent weeks, but the U.S. currency strengthened on Thursday, making metals priced in dollars more expensive other currency holders.

Aluminum was at $1,640 from $1,663. LME inventories of the metal, used in transport and packaging, rose 2,500 tonnes, nearing a record high close to 4.4 million tonnes.

Aluminum rose about 16 percent in the second quarter, buoyed by Chinese demand and a slew of improving economic data.

But idled smelters restarting and continued weak economic conditions could hinder prices, analysts said.

Steel-making ingredient nickel was little changed at $16,450, while battery material lead was at $1,700 from $1,739.

Zinc traded at $1,560 a tonne from $1,595 and tin was last quoted at $14,300/14,350 from $14,500.

Worries about nearby tin supplies have pushed the premium for cash material over the three-month contract to around $75 a tonne from a discount of around $40 a tonne in mid-June.

Earlier, the LME experienced technical problems with its price updates.