By Matt Scuffham

NEW YORK (Reuters) – Global stocks sought direction on Wednesday, while gold hit a one-week high and the dollar fell to a six-week low as investors waited to see whether an agreement could be reached on a fresh U.S. coronavirus relief package.

The White House and Democrats in the U.S. Congress moved closer to agreement on measures on Tuesday as President Donald Trump said he was willing to accept a large aid bill.

Signs of opposition from Trump’s Republican Party may have added to some caution in markets, however, slowing the move higher in U.S. borrowing costs.

Senate Majority Leader Mitch McConnell provided no timetable for considering a relief bill and privately told his fellow Republicans he did not favor a deal before the Nov. 3 presidential and congressional elections, a senior Senate Republican aide told Reuters.

Some investors doubted whether a deal could be reached.

“I think that Mitch McConnell holds the cards here,” said Ed Moya, senior market analyst at OANDA. “I would be surprised if a deal was reached.”

The Dow Jones Industrial Average fell 38.13 points, or 0.13%, at the open to 28,270.66.

The S&P 500 opened lower by 3.21 points, or 0.09%, at 3,439.91, while the Nasdaq Composite gained 13.90 points, or 0.12%, to 11,530.39 at the opening bell.

The MSCI world equity index, which follows shares in nearly 50 countries, was flat, its earlier Asia-powered gains eroded when European shares turned negative in early trading and fell further through the morning.

The Euro STOXX 600 fell 0.9%, led lower by healthcare and real estate shares. Indexes in Paris and Frankfurt fell 1% and 0.9% respectively. Gains for sterling put pressure on London shares.

Earlier, Asia-Pacific shares outside Japan gained 0.4%.

Gold, considered a hedge against inflation, currency debasement and uncertainty, has gained more than 26% this year, driven mainly by unprecedented levels of global stimulus to cushion economies from the coronavirus-induced slump.

Spot gold was up 0.6% at $1,917.57 per ounce by 8:12 a.m. ET (1212 GMT), after touching its highest since Oct. 13. U.S. gold futures rose 0.3% to $1,920.90 per ounce.

Bets on U.S. coronavirus relief also played out in government bonds markets.

U.S. Treasury yields held near their highest levels in four months on Wednesday on expectations a deal can be reached.

The benchmark 10-year U.S. Treasury yield was around 1.5 basis points higher on the day at 0.82%, having touched fresh four-month highs at 0.84%.

The dollar fell against a basket of currencies as hopes for the pre-election stimulus package led traders to buy riskier currencies. It was last down 0.3% at 92.764.

The Chinese yuan reached a more-than-two-year high on firmer central bank guidance and recent data showing a sustained recovery in the world’s second-largest economy.

The yuan was up 0.3% at 6.6552, taking gains against the dollar this year to around 4.5%. Its rise helped lift the Australian dollar, weighed down by expectations of a rate cut in November, from Tuesday’s three-week low.

Elsewhere, sterling rose to a one-week high against the U.S. dollar on Wednesday after the European Union’s Brexit negotiator, Michel Barnier, said a new trade deal with Britain was “within reach”.

The pound rose 0.8% to $1.3050, its highest since Oct. 14. The British currency also rose against the euro by 0.6% to 90.80 pence on the comments.

Oil prices eased after a surprise buildup in U.S. crude stockpiles stoked concerns about a global supply glut and a spike in global COVID-19 cases fueled fears of a stalled oil demand recovery.

Brent crude futures for December delivery were at $42.44 a barrel, down 72 cents, or 1.67%, as of 8:09 a.m. ET (1209 GMT), while December U.S. West Texas Intermediate (WTI) crude futures slipped 73 cents, or 1.75%, to $40.97. Both benchmarks rose in the previous session.

(Reporting by Matt Scuffham; editing by Jonathan Oatis)