(Adds New York dateline, byline, COMEX prices and comment)
* Traders fears bounce will be short-lived
* Euro jumps after ECB's policymaker comments
* COMEX copper will test support at $3.24 - analyst
By Josephine Mason and Silvia Antonioli
NEW YORK/LONDON, July 25 (Reuters) - Copper prices in New York bounced back from one-month lows on Wednesday, snapping three days of losses as a rally in the euro against the dollar and hopes for more Federal Reserve stimulus more than offset deepening gloom over the euro zone.
The market tracked a broad comeback across commodities as the euro recovered from two-year lows even as focus remained on a darkening debt outlook for Spain and other countries that use the single currency.
In New York, the COMEX September copper contract rose 2.15 cents, or 0.64 percent, to settle at $3.3745 per lb, after hitting a one-month low of $3.332 in the morning.
"This is a bit of a relief rally. Even in the face of poor earnings and data, the U.S. market optimism is unabashed," said Sean McGillivray, head of asset allocation at Great Pacific Wealth Management, referring to weaker-than-expected Apple Inc earnings and housing data that revealed the biggest drop in U.S. single-family home sales in more than a year.
Benchmark three-month copper on the London Metal Exchange traded at $7,440.50 a tonne in official rings or 0.3 percent up from Tuesday's close of $7,417. Prices earlier fell to $7,344.25, the lowest since June 27.
Downbeat data bolstered expectations that the Fed will soon take further steps to stimulate the ailing U.S. economy, the world's largest.
But with the need for additional measures reflecting underlying economic weakness, many viewed Wednesday's optimism as premature and predicted the bounce would be short-lived.
"The trend is still lower, growth expectations are lower, underpinned by optimism with the thought of stimulus, but the (Fed's) accommodative policy has so far been ineffective," McGillivray said.
Some called it a "dead-cat bounce", slag for a small but temporary rally that follows significant declines.
"I think it'll come back down," said a New York-based metal analyst, adding that he expects copper to test $3.24 per lb, just below the lows seen in June.
POCKET OF STRENGTH
While underlying sentiment was gloomy, the bulls pointed to more upbeat news out of China. Minmetals Resources Ltd, a unit of the country's biggest metals trader, predicted that new stimulus spending by the world's largest copper consumer would help lift the global copper market.
That outlook was cemented by a research note from influential Goldman Sachs metals analysts, who said they expect activity at Chinese copper fabricators and end-users to improve in the second half of the year after six months of painful destocking.
The report, which followed a trip to China, struck a relatively encouraging note on the strength of demand from copper-intensive sectors, with cable sales estimated to have grown 5-12 percent in the first half due to property sector growth and power grid investment.
It cautioned, though, that air-conditioning output growth ranged from a drop of 10 percent to a rise of 8 percent year-on-year in the first half.
Even so, the report came a day after HSBC data showed the country's manufacturing output in July grew at its fastest pace in nine months.
"We expect recent aggressive rate cuts as well as fiscal stimulus to produce results and help to boost economic activity towards the end of the third quarter," VTB Capital said in a research note.
"Beijing's efforts to stimulate the economy will, in our view, bring growth rates back to highs near 8 percent."
Copper drew strength from a jump in the euro on comments from European Central Bank policymaker Ewald Nowotny that he could see grounds for giving the euro zone bailout fund a banking license that would increase its crisis-fighting firepower.
While the news prompted a flurry of short-covering, analysts fretted that the market might have put too much emphasis on the comment given ECB opposition to date.
A weaker U.S. unit makes dollar-priced commodities such as metals cheaper and therefore more attractive for holders of other currencies.
In other metals, tin traded at $17,770 from $17,525 and zinc , used in galvanizing, at $1,810 from $1,797 at Tuesday's close.
Battery material lead was untraded in rings but bid at $1,864 from $1,860 and aluminium, also untraded, was bid at $1,880 from $1,869.
Nickel traded at $15,755 from $15,750.
In industry news, LME shareholders voted in favor of a $2.2 billion offer by the Hong Kong stock exchange for the British institution, the world's largest industrial metals marketplace.
Metal Prices at 2001 GMT
Metal Last Change Pct Move End 2011 Ytd Pct
move COMEX Cu 338.85 3.55 +1.06 343.60 -1.38 LME Alum 1870.00 1.00 +0.05 2020.00 -7.43 LME Cu 7446.00 29.00 +0.39 7600.00 -2.03 LME Lead 1855.00 -5.00 -0.27 2035.00 -8.85 LME Nickel 15850.00 100.00 +0.63 18710.00 -15.29 LME Tin 17340.00 -185.00 -1.06 19200.00 -9.69 LME Zinc 1801.00 4.00 +0.22 1845.00 -2.38 SHFE Alu 15260.00 -140.00 -0.91 15845.00 -3.69 SHFE Cu* 53910.00 -790.00 -1.44 55360.00 -2.62 SHFE Zin 14360.00 -170.00 -1.17 14795.00 -2.94 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Dale Hudson and Alison Birrane)