Copper closed lower on the London Metal Exchange (LME) on Tuesday on a wave of late selling, and the market remained wary of further large scale liquidation before year end, dealers said.
By the close, three months copper was $4,410 a tonne, down $10 from Monday's kerb close.
"The question people are asking is whether the funds will push some more money into metals before the end of the year or whether they will liquidate," Maqsood Ahmed, analyst at Calyon said.
"Momentum is slowing and we are certainly due a correction, but no one is willing to bet whether it will take place in 2005 or early 2006," he said.
Copper trading has been volatile since the metal hit a record high of $4,478 a tonne earlier this month, with low liquidity exaggerating moves down towards $4,315 last week.
"People who tried day trading hoping for a move above $4,450 were disappointed and lightened their loads before they went home today," an LME dealer said.
In the longer term prices were seen rising further.
"A sell off before Christmas would be a good buying opportunity. There may be a little squaring up before the year end, but if you pick up metal at the lower numbers you won't go far wrong," he said.
Dealers expected the market to move between $4,320 and $4,450 in the near term, while support was seen at the 30-day moving average of $4,250 if it moved below $4,320.
Aluminium was down $5 at $2,225, while nickel was at $13,350, versus $13,775.
Internation Aluminium Institute production data for November showed daily output excluding China was 65,100 tonnes and including China, daily production was 87,800 tonnes versus 87,000 in October.
Zinc was at $1,821, down $2, giving up early gains after the LME said it would not lift a suspension on more than 70,000 tonnes of zinc held in New Orleans that was damaged by flooding caused by Hurricane Katrina.
Tin was at $6,650, down $150, while lead was down $1 at $1,083.
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