Updates prices at 1605 GMT

By Eric Onstad

LONDON, Aug 2 (Reuters) -Copper prices edged higher on Friday, supported by growing expectations of U.S. interest rate cuts and slightly firmer physical demand in China, though investors remained cautious amid lacklustre economic data.

Three-month copper CMCU3 on the London Metal Exchange was up 0.3% at $9,082 a metric ton by 1605 GMT, steadying after Thursday's 1.9% decline.

U.S. Comex copper futures HGc2 gained 0.5% to $4.10 a lb.

"On the macro front it's a mixed picture. The easing stance from the Fed is positive, but U.S. and Chinese data have been quite weak," said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.

U.S. jobs data missed expectations on Friday, spurring traders to bet that the Federal Reserve will start easing policy in September with a big half-percentage-point interest rate cut.

The weak data knocked the dollar lower =USD, supporting copper by making commodities priced in the U.S. currency less expensive for buyers using other currencies. FRX/

While recent factory data from top metals consumer China has been weak, there has been evidence of some renewed physical buying in China. The Yangshan copper premium SMM-CUYP-CN rose to a more than three-month peak this week, signalling import appetite.

Downstream consumers have been attracted by lower prices after copper shed 18% since its record peak of more than $11,000 a ton in May, said commodity markets strategist Fu.

"You have this buying-on-dip demand, but arguably not too strong, given the weak macro data. Demand is probably not strong enough to push prices materially higher."

The most traded September copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 lost 1.7% to 73,700 yuan ($10,211.57) a ton.

In another slightly bullish sign, SHFE deliverable copper inventories declined 2% on Friday, but they were still not far from the highest level in four years.

Market participants expect a demand pickup in China starting in September, a time of seasonally strong consumption.

In other metals, LME aluminium CMAL3 eased 1.4% to $2,263.50 a ton, zinc CMZN3 shed 1.7% to $2,661, lead CMPB3 dropped 1.8% to $2,025, while tin CMSN3 rose 0.9% to $30,170 and nickel CMNI3 added 0.1% to $16,290.

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($1 = 7.2173 Chinese yuan renminbi)

Reporting by Eric Onstad; Additional reporting by Siyi Liu and Mei Mei Chu in Beijing; Editing by David Goodman, Emelia Sithole-Matarise and Shounak Dasgupta

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