Sierra Resource Group Inc. (fka SIRG)

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LONDON AND SHANGHAI (Reuters) - Copper edged higher on Tuesday helped by a softer dollar and hopes of economic stimulus in China, but gains were capped by fears Spain's banking crisis could worsen the euro zone debt situation and hit metals demand.

Benchmark copper on the London Metal Exchange was 0.6 percent higher at $7,727.25 by 0849 GMT, from $7,689 a tonne at the close on Monday, extending a three-session winning streak during which it had risen 2 percent by Monday's close.

This increase, however, follows a 10 percent fall earlier this month.