(Reuters) - London copper rose to its highest in more than a month on Friday and was on track to log a fourth week of gains in five, supported by the European Central Bank's plan to buy bonds to shore up the region's economy.
Investors were also looking to a key U.S. jobs report later in the day for fresh clues on the health of the global economy, though an improved labor market could reduce pressure on the Federal Reserve to take steps such as a third round of bond buying, known as quantitative easing (QE).
"There are still questions as to whether the ECB program will help calm investors and whether you'll get QE from the Fed," said Credit Suisse metals analyst Ivan Szpakowski.
Three-month copper on the London Metal Exchange rose 1.08 percent to $7,783 a tonne by 0706 GMT, having earlier hit $7,788.50 a tonne, its highest since July 19.
The most-traded December copper contract on the Shanghai Futures Exchange also rose 0.8 percent to close at 56,650 yuan ($8,900) a tonne, having earlier hit 56,890 yuan, its highest since May 14.
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The ECB agreed on Thursday to launch a new and potentially unlimited bond-buying scheme to lower struggling euro zone countries' borrowing costs, in a bid to draw a line under the debt crisis there.
"Copper has rallied pretty well, so the risk is we could see a sell-off. September is usually one of the stronger months of the year, ahead of the October holidays (in China) so there's a seasonality effect," Szpakowski said.
"October will be even worse this year because you have the mid-Autumn festival and the national day holiday back to back, which is not always the case."
China, the world's top consumer of metals, and accounting for 40 percent of refined copper demand last year, will be on holidays for the first week of October.
Traders said sentiment had improved this week after China gave the green light for 60 infrastructure projects as it looks to energize an economy mired in its worst slowdown in three years, fuelling hopes that the world's growth engine may get a lift from the fourth quarter.
London copper has erased year-to-date losses of 5 percent seen in June and is up more than 2 percent this year.
European stocks rose in early trade while the euro steadied on Friday after the ECB's announcement. A firmer euro supports dollar based commodities because they become cheaper for holders of other currencies. .EU
U.S. private employment rose more than expected in August and growth in the services sector gathered pace, boosting expectations for a better reading in the government's nonfarm payrolls report later on Friday.
Market participants will also be looking to China's inflation and industrial output data for August, due on Sunday, for further clarity on demand in the world's second largest economy.
Traders said there were signs of a small pick up in China's physical buying as industry stocks up before the October break.
Base metals prices at 0707 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7783.00 83.00 +1.08 2.41
SHFE CU FUT DEC2 56650 430 +0.76 2.33
HG COPPER DEC2 354.55 2.90 +0.82 3.19
LME Alum 1986.50 11.50 +0.58 -1.66
SHFE AL FUT DEC2 15645 05 +0.03 -1.26
LME Zinc 1916.00 8.00 +0.42 3.85
SHFE ZN FUT DEC2 15060 90 +0.60 1.79
LME Nickel 16200.00 140.00 +0.87 -13.42
LME Lead 2055.00 7.00 +0.34 0.98
SHFE PB FUT 15500.00 75.00 +0.49 1.41
LME Tin 19850.00 125.00 +0.63 3.39
LME/Shanghai arb^ 1071
Shanghai and COMEX contracts show most active months
($1 = 6.3428 Chinese yuan)
(Reporting by Melanie Burton; Editing by Joseph Radford and Miral Fahmy)