* U.S. monetary policy uncertainty wighs on metals
* Copper down 0.9 percent
* Weaker dollar offers support (Adds analyst comment, updates prices, changes dateline from MELBOURNE)
By Eric Onstad
LONDON, Sept 20 (Reuters) - Copper ended two days of gains on Thursday as concerns resurfaced about the health of the global economy and higher U.S. interest rates ahead of a central bank meeting.
Investors widely expect the U.S. Federal Reserve to increase interest rates next week, but future monetary policy remains uncertain.
“What is breaking the advance of metals is the uncertainty about the next Fed meeting and general liquidity in the financial system,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
“The next big trade is to sell the dollar and buy commodities, but we need a trigger, which I think will be the next Fed meeting. If they are not too hawkish, that might be the signal for funds to start to be a bit more aggressive in metals.”
Copper jumped to its highest in three weeks on Wednesday after a new round of U.S.-China trade tariffs were not as severe than expected, but investors remained wary about the impact on global economic growth and most base metals lost steam on Thursday.
Benchmark copper on the London Metal Exchange was down 0.9 percent at $6,066 a tonne by 1036 GMT.
Copper has slumped 18 percent since touching a 4-1/2 year peak of $7,348 in June but has recovered 5 percent from a one-year low of $5,773 in August.
* STEEL: Weighing on prices, especially steel-linked metals nickel and zinc, was a 1.2 percent slide in prices of Shanghai construction steel rebar on Thursday after four sessions of gains.
* ZINC: LME zinc pared gains to $2,443 a tonne, a rise of 0.3 percent, after the metal used to galvanise steel touched a two-week high of $2,471.
* ALUMINIUM OUTPUT: Global primary aluminium output edged up by 0.16 percent month on month to 5.485 million tonnes in August while Chinese production was estimated to have risen by 0.16 percent to 3.12 million tonnes, data showed on Thursday.
* ALUMINIUM: LME aluminium rose 0.7 percent to $2,040 a tonne.
“Investors are awaiting new impetus after the price ended back at the lower range of the corridor of between $2,000 and $2,200, in which it has been trading since July. High Chinese supply continues to weigh on its price,” Commerzbank said in a note.
* DOLLAR: Metals were supported by a weaker dollar, with the currency falling to a seven-week low against a basket of major currencies on Thursday.
Reporting by Eric Onstad Editing by David Goodman