* Workers at Colombia nickel mine cancel strike plans
* Net fund long position for LME copper more than halves
* Zinc to pull back to $1,900/T-Macquarie
* Coming up: Federal Reserve policy statement at 1800 GMT (Updates with closing prices)
By Eric Onstad
LONDON, June 15 (Reuters) - Aluminium hit its highest level in nearly six weeks on Wednesday and copper also jumped as the dollar dipped and investors bought more risky assets ahead of a Federal Reserve meeting.
All the metals on the London Metal Exchange were swept higher, also getting a boost as some speculators closed out bearish positions.
Three-month LME aluminium CMAL3 closed 1 percent higher at $1,626 a tonne, the strongest since May 5, building on gains of 0.6 percent on Tuesday.
LME data showed one entity held 40-50 percent of short-term aluminium futures 0#LME-WHC .
"The base metals markets seem to be playing along to the tune of risk-on today with equity markets firmer today as well," said Daniel Briesemann at Commerzbank (DE:CBKG) in Frankfurt.
European shares rose as expectations of dovish words from the U.S. Federal Reserve soothed investors on edge over whether Britain will vote to leave the European Union. CMCU3 shot up 2.5 percent to finish at $4,635, the highest since June 7.
The metal used in construction and power sectors had fallen in three of the past four sessions, touching a four-month low of $4,483.50 on June 9.
"In the short term, you could definitely talk about position clearing at the moment and prices being pushed up by speculators," Briesemann said.
LME data showed the net long position of funds trading copper on the exchange more than halved to 9,837 lots last Friday from 24,838 lots the previous week. LME-CA-MNET
A slightly weaker dollar index .DXY also offered support, making dollar-denominated commodities less expensive to buyers using other currencies.
The dollar was under pressure pending a Fed statement due on Wednesday at the end of a two-day policy meeting, where interest rates are not expected to rise following a recent batch of weak U.S. data. analysts say the British referendum on June 23 on whether to stay in the European Union may dominate market sentiment and weigh on prices.
LME nickel CMNI3 rose 1.7 percent to end at $9,045 a tonne even though union workers at Colombia's Cerro Matoso nickel mine cancelled plans to strike on Tuesday after reaching a deal on pay increases and benefits. CMZN3 , the top LME performer this year with gains of 27 percent on the back of worries about potential shortages, closed up 0.9 percent at 2,037.
"In the near term we think a modest reset in prices to about $1,900 per tonne is more likely, given a lack of tightness in the metal market, but deeper into the second half we see prices rebounding and expect to see year-end around $2,150-2,200/t," Colin Hamilton, head of commodities research at Macquarie, said in a note.
Lead CMPB3 climbed 0.7 percent to finish at $1,697 and tin CMSN3 ended unchanged at $16,975.
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 = 6.5933 Chinese yuan)