METALS-Copper slips after 3-week rise as Fed eyed
* Markets focus on Fed, little fundamental news to drive metals
* Copper down 8 percent so far this year
* BHP Billiton cuts costs, steps up iron ore, copper output
(Updates with official prices)
LONDON, Aug 20 (Reuters) - Copper fell on Tuesday, following commodities and equities on investor unease over an expected cut in U.S. economic stimulus, which would end the cheap money that has helped drive markets higher.
Three-month copper on the London Metal Exchange was $7,300 a tonne in official rings from $7,305 at the close on Monday, when it fell 1.3 percent.
World shares sank to their lowest level in more than a month, while Brent crude oil lost more than $1 to $108 a barrel, and gold fell for a second straight session.
Yields on U.S. Treasuries edged off two-year highs as investors positioned for the probability that the U.S. Federal Reserve will begin tapering stimulus as early as next month.
The investor focus for Wednesday was on minutes from the most recent Fed meeting, which could offer more hints on when the U.S. central bank will start winding down its $85 billion-a-month support programme.
Central bankers from around the globe arriving this week in Jackson Hole, Wyoming for an annual get-together also could offer signals for any change in U.S. monetary policy, even though Fed Chairman Ben Bernanke will not attend.
"With Jackson Hole and Chinese macro data on the near-term horizon, we would expect continued volatility amongst thin volumes," Marex Spectron analyst George Adcock said.
China's HSBC flash PMI is due on Thursday.
Adcock said there was little fundamental news to drive base metals.
"Our stance is that our short-term data remains positive, but our macro gross indicator and liquidity are starting to look quite toppy, although the market is still short. And thus we are not advising short positioning yet, and we will maintain a long bias until that changes," he said.
Copper prices logged gains last week for a third week running, hitting $7,420 on Friday, the highest in more than 10 weeks. Prices are still down more than 8 percent on the year.
"I do expect some better numbers from China in the next one to two months, and that gives us support for another leg up in copper prices, but it's clearly not going to be sustained," Dominic Schnider of UBS Wealth Management in Singapore said.
Top metal consumer China's focus on reining in its economy could compel it to take steps if factory activity picked up momentum too quickly, which should act as a brake on metals prices, Schnider added.
Global miner BHP Billiton missed forecasts with a 15 percent fall in half-year profit and said it would slow a long-awaited move into potash to curb spending over the next four years.
BHP and Glencore Xstrata wrapped up the results season for the world's big five miners. BHP held up slightly better than the others as it stepped up output of iron ore, copper, coal and oil and slashed costs in the face of sliding commodity prices.
In other metals, aluminium was at $1,906 a tonne in rings, down from $1,916 at the close on Monday, and zinc fell to $1,982 from $1,988.50.
Nickel, untraded in rings, was bid at $14,650 from $14,810, while lead, also untraded, was bid at $2,233 from $2,250, and tin was bid at $21,900 from a last bid $21,850.
(Additional reporting by Melanie Burton; Editing by Keiron Henderson and Jane Baird)