* Copper in tight range, wary of Fed announcement
* Coming up: Fed releases policy statement at 1800 GMT (Recasts, updates prices, adds comment)
By Louise Heavens
LONDON, March 16 (Reuters) - Copper held firm on Wednesday in cautious trade ahead of the outcome of a Federal Reserve policy meeting, which is expected to leave interest rates on hold but signal how quickly the bank may tighten this year.
Benchmark copper CMCU3 on the London Metal Exchange was up 0.1 percent at $4,949 a tonne by 1506 GMT, having traded in a tight range of around 50 cents.
The metal used in power and construction has risen 8 percent in the past month but may retest the $4,800 support level unless evidence emerges of physical buying in China.
"As we go into the second quarter we should get some physical buying picking up, maybe some restocking," said Robin Bhar, head of metals research at Societe Generale (PA:SOGN). "But we'd need to see a turnaround in inventories to really put a solid floor under prices."
Sergey Raevskiy at investment bank SP Angel said data on China's investment in the power grid will provide direction. "If the amount of money the government is putting into grid infrastructure is down on last year, it will be very bearish for copper," he said.
The metals complex drew some support from positive U.S inflation data, although investors expect it would have little to no impact on the Federal Open Market Committee decision due later. aluminium CMAL3 fell 0.3 percent to $1,515.
Analysts at Macquarie said that now the market for aluminium was balanced, there was a risk more capacity coming on line would snuff out the recovery.
"LME aluminium prices should remain at a level which keeps capacity idled - in our view around $1,400 a tonne, for the foreseeable future," they said in a note.
Lead CMPB3 recovered earlier losses to trade 0.2 percent higher at $1,790 a tonne, while nickel CMNI3 rose 0.6 percent to $8,610.
Tin CMSN3 was flat at $16,850 a tonne, while zinc MZN3 was the best performer of the complex, up 1.3 percent at $1,765 a tonne.
PRICES
Three month LME copper
CMCU3
Most active ShFE copper
SCFcv1
Three month LME aluminium
CMAL3
Most active ShFE aluminium
SAFcv1
Three month LME zinc
CMZN3
Most active ShFE zinc
SZNcv1
Three month LME lead
CMPB3
Most active ShFE lead
SPBcv1
Three month LME nickel
CMNI3
Most active ShFE nickel
SNIcv1
Three month LME tin
CMSN3
Most active ShFE tin
SSNcv1
($1 = 6.5198 Chinese yuan renminbi) (Editing by Dale Hudson and Susan Thomas)