By Herbert Lash

NEW YORK (Reuters) - Oil prices slumped and a gauge of global equity markets on Friday edged away from an all-time high it nearly breached earlier in the week as doubts simmered over the outlook for signing an initial deal to ease U.S.-China trade tensions.

Gold prices rose and stocks on Wall Street slipped after China warned on Thursday it would take "firm counter measures" against U.S. President Donald Trump's decision to ratify a bill backing protesters in Hong Kong.

"It is definitely a concern that the signing of the Hong Kong bill will be seen as an impediment to an agreement," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

"At this point, investors are also using this as an opportunity to take some profits," Meckler said.

Tensions could be further frayed after two sources told Reuters that the U.S. government may expand its power to stop more foreign shipments of products with U.S. technology to China's Huawei Technologies.

Selling intensified on Wall Street in the last hour of trading after the report on Huawei. All three of Wall Street's major indexes set record highs earlier in the week on hopes for an imminent "phase one" U.S.-China trade deal.

MSCI's all-country world index, which tracks shares in 49 countries, shed 0.48%, or about 4 points lower than a record peak of 550.63 it established in January 2018.

Country indices for Germany and France closed slightly lower and the pan-European STOXX 600 index lost 0.44%.

The dollar fell from a six-week peak against a basket of currencies as the still unsigned U.S.-China trade deal kept investors on edge at the end of a holiday-shortened week due to the Thanksgiving holiday on Thursday and early close on Friday.

On Wall Street, the Dow Jones Industrial Average fell 112.59 points, or 0.4%, to 28,051.41. The S&P 500 lost 12.65 points, or 0.40%, to 3,140.98 and the Nasdaq Composite dropped 39.70 points, or 0.46%, to 8,665.47.

The MSCI world index has climbed 2.3% this month, its third straight month of gains, helped in part by hopes the world's two biggest economies are moving toward a resolution. The trade war has roiled financial markets and disrupted supply chains.

The index is up 20% this year, helped by lower interest rates and injections of government stimulus around the world.

With recent data showing a pick-up in economic growth and 10-year government debt yields likely to remain under 2%, the outlook for stocks is a Goldilocks scenario, said Dev Kantesaria, founder portfolio manager of hedge fund Valley Forge Capital Management, Wayne, Pennsylvania.