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Copper prices steadied at close to two-month highs on Tuesday as expectations of an interest rate reduction by the U.S. Federal Reserve a day ahead pressured the dollar.
Three-month copper on the London Metal Exchange (LME) ticked up 0.1% to $9,396 per metric ton by 0935 GMT. It hit $9,466.5 the previous session, a level last seen on July 18.
Both copper and aluminium are likely to trade in a narrow range as funds are readying their positions ahead of the Fed decision on Wednesday, a trading source said.
Aluminium also firmed up 0.1% at $2,331.5 with a large futures position on the LME to buy aluminium in October and sell in November <0#LME-FBR>.
Supporting metals prices was mainly a weaker dollar now near a one-year low on rising expectations for an outsized rate cut from the U.S. central bank. A weaker dollar makes greenback-priced metals cheaper to holders of other currencies.
But zinc and lead prices came under pressure following a sharp rise in inventories in Singapore warehouses monitored by the LME.
Three-month zinc was down 0.9% at $2,921 and lead was down 0.8% at $2,022.
Lead inventories rose 17% or 30,225 tonnes to 205,000 tonnes, while zinc inventories were up 12,950 tonnes.
The increase however shows little about changes in supply and demand for zinc and lead, another trader source said, given the major inflows and outflows of the two metals in Asian locations for rent deals over the past few months.
For other metals, nickel edged up 0.2% to $16,250 and tin fell 0.4% to $31,800 a ton.
(Reporting by Julian Luk in London; editing by David Evans)