* Fed chief Bernanke signals possible steps to prevent recession
* Declines in past week made commodities attractive (Adds production forecasts, updates prices)
By Jane Lee
KUALA LUMPUR, Oct 5 (Reuters) - Copper snapped five days of falls on Wednesday, leading a rebound in commodities after the U.S. central bank said it could take steps to keep the economy from slipping into recession and last week's falls made energy and metals alluring for investors.
Brent crude rose 1.8 percent, gold gained 0.4 percent, and grains added as much as 1.4 percent.
The gains for commodities came as European stock index futures rose despite investor scepticism whether Europe was doing enough to fix its sovereign debt crisis, concerns that prompted Asian stocks to trim earlier gains.
MSCI's broadest index of Asia Pacific shares outside Japan was up 0.5 percent, having earlier risen 0.9 percent. Japan's Nikkei benchmark fell 0.8 percent, as investors cautiously gauge Europe's progress in tackling its debt woes.
"Commodity resources over the past few weeks have basically fallen on worry that recession may be around the corner and even the most resilient of economies like China may be affected," said Song Seng Wun, a regional economist at CIMB Research in Singapore.
"To some extent, we don't know whether what we're seeing currently, in terms of recovery, is more of a technical thing."
The Fed is prepared to take further measures to help an economy that is "close to faltering," U.S. Federal Reserve Chairman Ben Bernanke said on Tuesday in his bleakest assessment of the U.S. economic recovery.
London Metal Exchange (LME) benchmark copper gained 2.2 percent to $6,945 a tonne by 0736 GMT, after climbing as high as $6,997. It hit its lowest level since July 2010 on Monday, at $6,635, and has lost a tenth of its value in the past five days.
The global market for refined copper is seen in a 250,000 tonne production deficit in 2012, before easing to become near balanced in 2013 as global growth slows, the International Copper Study Group (ICSG) said on Tuesday.
The ICSG said that it saw a production deficit of 200,000 tonnes worldwide this year.
Spot gold rose 0.4 percent to $1,626.45 an ounce. It was one of the few commodities that managed to chalk up gains in the third quarter. Prices increased 8.2 percent in the three months to Sept. 30.
In London, ICE Brent crude for November delivery climbed 1.9 percent to $101.77 a barrel. Prices closed below $100 on Tuesday for the first time since February.
Brent had fallen three straight weeks through Oct. 2. Prices are up 6.9 percent for this year, after political turmoil in the Middle East disrupted oil production.
U.S. crude CLc1 was up $2.38 at $78.06 a barrel, after touching an intraday high of $78.46.
WEAKER DOLLAR
Commodities also received a boost from the weaker dollar. The greenback declined 0.5 percent against a basket of major currencies, making commodities cheaper for buyers holding other currencies.
European finance ministers agreed on Tuesday to safeguard their banks as doubts grew about whether a planned second bailout package for debt-laden Greece would go ahead.
Still, concern over Greece's financial position remained investors' focus after the Euro zone postponed approval for an aid payment to the nation to mid-November from October.
The Reuters-Jefferies CRB index of 19 commodity futures had clawed back above the one-year low hit in early commodities selling, but was still down 1.05 percent at Tuesday's close.
GRAINS REBOUND
U.S. grain futures were stronger across the board on Wednesday, with corn futures up as much as 1.4 percent, after a late rush in global markets overnight.
Chicago Board of Trade wheat for December delivery gained 1.4 percent to $6.12 per bushel.
The actively traded November soybeans contract rose 0.7 percent to $11.67-3/4 per bushel.
"Macroeconomic concerns will continue to drive near-term price direction for commodities," Phillip Futures Pte said in a report e-mailed on Wednesday. "Uncertainties created by the European debt crisis may result in a disconnect between market fundamentals and price performance." (With additional reporting by Lewa Pardomuan; Editing by Clarence Fernandez)
