MANILA, May 9 (Reuters) - London copper edged higher on Wednesday after sliding more than 1 percent in the previous session, but gains were capped with investors cautious after the United States pulled out of an international nuclear deal with Iran. U.S. President Donald Trump said he would reimpose U.S. economic sanctions on Iran to undermine "a horrible one-sided deal that should have never, ever been made". Firm copper demand in top user China also spurred the price of the metal higher, although a lack of supply disruptions suggests the market is not as tight as many had expected, said Helen Lau, analyst at Argonaut Securities in Hong Kong. "There's no strong case for a big price recovery in copper given better than expected supply, especially in South America," said Lau. Three-month copper on the London Metal Exchange was up 0.9 percent at $6,802.50 a tonne as of 0249 GMT. SHANGHAI COPPER: The most-traded July copper contract on the Shanghai Futures Exchange was off 0.7 percent at 51,030 yuan ($8,007) a tonne, tracking Tuesday's losses on the London contract. DOLLAR: The gains in London copper come even as the U.S. dollar stayed near a four-month high versus a basket of major currencies. The dollar's advance was briefly stalled after Trump's Iran announcement. CHILE OUTPUT: Copper output in Chile, the world's top producer and exporter, rose 18.9 percent in the first quarter of 2018 from the same period a year earlier to 1.42 million tonnes. U.S.-CHINA TALKS: Trump and Chinese President Xi Jinping discussed ongoing trade issues, as both sides continue to position themselves amid a heated feud over tariffs between the world's two largest economies. FEDERAL RESERVE: The Federal Reserve is entering new terrain in its post-crisis planning: how to describe the conditions under which it would try to slow the economy and to do so without alarming financial markets. ASIA GROWTH: The growth outlook for Asian economies remains strong, but the region is vulnerable to sudden tightening in global financial conditions, further market corrections and a shift towards protectionist policies, the International Monetary Fund said. MARKETS: Crude oil prices jumped back to near 3-1/2-year highs on Wednesday after Trump's move on Iran, sparking worries about global oil supplies. OTHER METALS: LME aluminium rose 0.6 percent to $2,369 a tonne, zinc climbed 1.1 percent to $3,094.50 and lead advanced 0.8 percent to $2,307. In Shanghai, aluminium eased 0.6 percent to 14,660 yuan a tonne and nickel slipped 1 percent to 103,830 yuan.