* Copper up nearly 5 pct on week in relief rally * ECB moves to shore up ailing euro zone banks * Coming Up: U.S. non-farm payrolls; 1230 GMT By Marie-Louise Gumuchian LONDON, Oct 7 (Reuters) - Copper rose on Friday, building on the previous session's gains, as efforts in Europe to contain the sovereign debt crisis drew buyers back, but investors remained cautious ahead of jobs data from the United States. The European Central Bank threw a lifeline to commercial banks, announcing on Thursday that it will provide longer-term cheap money for the growing number of European lenders which have seen wholesale funding dry up as market confidence ebbs. That spurred investors to buy back copper, which rose nearly 6 percent on Thursday in its biggest daily gain since February 2010, after it lost more than 25 percent in the third quarter. Three-month copper on the London Metal Exchange (LME) traded at $7,250.25 a tonne by 0903 GMT from Thursday's close of $7,225 a tonne, marking its third session of gains. The metal used in power and construction earlier hit a session high of $7,375 a tonne. "Whether this is a demonstration that base metal prices have found a bottom and can move upwards or whether this is some sort of dead-cat bounce, we'll know more this afternoon," Nic Brown, head of commodities research at Natixis, said, citing U.S. non-farm payrolls, due later on Friday. "The U.S. numbers will be very important. This is a market that still is going to be very nervous." At Thursday's close, copper has risen 4.6 percent so far this week, its steepest gain since climbing 5.5 percent in early April, and its first increase in five weeks, according to Reuters graphics. European stocks rose and the euro clung to gains. A weaker dollar makes commodities like metals cheaper for holders of other currencies. U.S. nonfarm payrolls are expected to have increased 60,000 last month, according to a Reuters survey, after being flat in August -- the first month in a year that the ailing economy failed to create jobs. "If you get some unpleasant numbers again out of the U.S. labour market then it will be very easy to see the market sliding back again," Brown said. "We need something which is at least reasonably ok out of the U.S." The brittle state of the global economy has hammered copper on concern that demand for the industrial metal would drop. Copper, down more than 23 percent this year, has fallen 28 percent from a record high of $10,190 touched in mid-February. CHINA RETURN AWAITED Also supportive to prices was data showing copper stocks at LME warehouses falling 4,625 tonnes to 467,100 tonnes. Inventories are still about a third higher since last December. There also appears to be no end in sight to an increasingly bitter wage dispute at Freeport-McMoRan's Cerro Verde mine in Peru a week after workers walked off the job, authorities said on Thursday. Copper's rebound this week happened at a time when top consumer China is off for a week-long public holiday, and traders say that suggests the rally might be short lived. Market participants have a mixed view on how the Chinese will react when trading there resumes on Monday, with some saying they could chase prices either way given most have squared positions prior to the National Day break. Some analysts have said Chinese buyers would be tempted to pick up copper below $6,000 a tonne, although Western players have already snapped up the metal after it slid to $6,635 this week, its lowest since July 2010. "Copper prices should recover from the late September sell-off in the fourth quarter and into 2012, supported by tight supply and restocking by Chinese consumers," ANZ said in a note. "But the market will continue to see significant headwinds from the uninspiring recovery in the US, moderating growth in China and renewed shocks in Europe." Global copper demand in the second half of this year may ease, but a drastic slowdown next year is unlikely, Italy-based copper product maker Prysmian said on Thursday. Among other metals, tin was at $22,800 from $22,200 a tonne while lead traded at $1,934.75 from $1,922 a tonne. Aluminium traded at $2,230.75 from $2,230 a tonne while zinc traded at $1,871 from $1,867 a tonne. LME data showed aluminium stocks down 3,025 tonnes to 4,548,725 tonnes while zinc stocks fell 2,800 tonnes to 807,925 tonnes. Nickel traded at $18,805 from $18,950 a tonne. First Quantum Minerals Ltd said nickel production is set to resume by the end of 2011 from Australia's Ravensthorpe mine following a two-year redevelopment programme. Metal Prices at 0906 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 329.90 5.70 +1.76 444.70 -25.82 LME Alum 2230.00 0.00 +0.00 2470.00 -9.72 LME Cu 7243.25 18.25 +0.25 9600.00 -24.55 LME Lead 1935.50 13.50 +0.70 2550.00 -24.10 LME Nickel 18827.00 -123.00 -0.65 24750.00 -23.93 LME Tin 22650.00 450.00 +2.03 26900.00 -15.80 LME Zinc 1870.75 3.75 +0.20 2454.00 -23.77 SHFE Alu 16640.00 165.00 +1.00 16840.00 -1.19 SHFE Cu* 54790.00 2190.00 +4.16 71850.00 -23.74 SHFE Zin 15400.00 715.00 +4.87 19475.00 -20.92 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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