LONDON: Some base metals fell on Tuesday ahead of an expected US central bank decision to hike interest rates with copper the biggest loser after a further rise in inventories.
Other metals held earlier gains following strong economic data from top metals consumer China. "I think it's people being cautious ahead of the Fed," said Richard Fu, head of Asia and Pacific at broker Amalgamated Metal Trading in London.
The US Federal Reserve is widely expected to raise interest rates on Wednesday for the first time in 2016 at the end of the two-day meeting.
"We suspect that the Fed's tone will sound more hawkish," analyst Edward Meir at broker INTL FCStone in New York said in a note. Benchmark copper on the London Metal Exchange had slipped 1.3 percent to $5,696 a tonne by 1616 GMT.
Copper, which shed 0.8 percent on Monday, was the worst LME performer on Tuesday after data showed another big inflow of inventories into LME-certified warehouses.
More than 50,000 tonnes of copper has arrived in the space of two days, sending on-warrant copper stocks - those not earmarked for delivery - up 47 percent to 160,375 tonnes.
Earlier in the European session, most metals were firmer after top metals consumer China posted its strongest retail sales growth of the year in November and surging steel production lifted factory output.
"When we were in China in November we talked to some corporates and they were telling us that the on-ground situation has been improving. I think that showed up in today's data," said Xiao Fu, head of commodity market strategy at Bank of China International in London.
Other data showed that growth in Chinese home sales in November was the slowest in a year as more cities tried to cool red-hot prices and the pace of new property investment also fell from recent highs.
Among other metals, LME zinc dropped 0.6 percent to $2,717 and lead fell 0.3 percent to $2,344. Nickel edged up 0.2 percent to $11,320 a tonne.
"Given the down trend line from the Nov. 11 high is firmly in place, we expect resistance in the $11,650 area," Dee Perera at broker Marex Spectron said in a note.
Aluminium added 0.5 percent to $1,739 and tin climbed 1.1 percent to $21,250.
Technical analyst Alex Rudolph at Commerzbank says aluminium is likely to see losses. "LME aluminium should consolidate further below its November high at $1794.50 and retest the $1,709/$1,680.50 area," he said in a note.
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