LONDON, June 25 (Reuters) - Copper fell on Thursday, retreating from more than one-week highs the previous day, after the Federal Reserve said the U.S. economy will remain weak, rekindling demand concerns.
The Fed on Wednesday tweaked its statement to say financial markets had improved, while repeating the economy will remain weak. [ID:nN24163547]
"An indication of caution -- they are pushing back expectations," John Meyer, an analyst at investment bank Fairfax, said of the Fed comments.
"Investors must now start to look for a protracted downturn and while there are a few signs of recovery in parts of the economy, there is not enough tangible evidence to be sure that we're coming out of recession later this year."
Copper for three-month delivery MCU3 on the London Metal Exchange fell to $5,035 a tonne in rings from $5,055 at the close on Wednesday.
The Fed comments added to a mixed economic picture, which has given direction to industrial metal prices in recent weeks.
On Wednesday data showed sales of new single-family homes slipped in May but copper, used in power and construction, rose to $5,057.75 a tonne, it's highest since June 16.
A rise in new orders for long-lasting U.S. manufactured goods and comments from the OECD that the global slowdown was nearing bottom, boosted prices.
Looking ahead, U.S. weekly jobless claims data, due at 1230 GMT, will give investors further economic clues.
"There are indicators, like a rising ratio of new orders to inventories in many countries, which suggest that the demand backdrop for metals may normalise," said Merrill Lynch in a note. "In 2010, we expect global metal demand to start expanding again." Copper, has risen about 60 percent this year, as gains in cancelled warrants -- material earmarked for delivery -- lifted sentiment.
