By Tatyana Shumsky and Katherine Dunn 
 

Copper prices jumped to their highest level in more than three weeks on Thursday after a national holiday in China put a pause on negative news from the world's leading metals consumer.

The most actively traded contract, for December delivery, rose 5.50 cents, or 2.4%, to settle at $2.3845 a pound on the Comex division of the New York Mercantile Exchange. This was the highest settlement since Aug. 10, when prices closed at $2.400 a pound.

Copper prices have been plumbing six-year lows as many investors wagered an economic slowdown in China would sap the country's demand for industrial metals. Recent data showed contraction in Chinese factory activity, and many traders worry the continued selloff in Chinese stocks heralds deeper economic woes from the world's no. 2 largest economy. Copper is widely used in manufacturing and construction making its price sensitive to shifts in investor outlook.

On Thursday, Chinese markets were closed for celebrations commemorating the end of World War II and traders there won't return to their desks till Monday.

"With China on holiday right now, the market is getting a reprieve from that weakness and volatility," said Dave Meger, director of metals trading at High Ridge Futures in Chicago.

Gains in stocks and crude oil prices are also signaling that investors are returning to more risky or economically sensitive assets, brokers said.

Some investors have also pared bets on lower copper prices, said David Wilson, director of metals research and strategy with Citigroup Inc. Money managers have been net-bearish on Comex copper futures and options for 12 straight weeks, according to data from the Commodity Futures Trading Commission released Friday.

Still, the outlook for copper remains bearish, with an economic slowdown in China, in particular, expected to dent demand for infrastructure-driven commodities such as this metal. Barclays estimates that copper import growth up until 2020 is likely to be around a third of that achieved in the past five years.

Underscoring the current bearish direction for resources, and their investors, commodity hedge fund Krom River, which managed around $1 billion at its peak, said that it is returning money to investors as it plans a shift in focus.

Settlements:

Sep $2.3900, up 5.70 cents; Range $2.3360-$2.4205

Dec $2.3845, up 5.50 cents; Range $2.3240-$2.4180

Write to Tatyana Shumsky at tatyana.shumsky@wsj.com

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(END) Dow Jones Newswires

September 03, 2015 14:30 ET (18:30 GMT)