Gold rises as virus woes dent risk appetite

Silver headed for third straight week of decline

Gold prices edged higher on Friday, as growing concern over the spread of the Delta variant of the coronavirus and its impact on economic recovery soured risk sentiment.

Spot gold rose 0.3% to $1,785.93 per ounce by 0553 GMT, and it's up about 0.4% for the week. U.S. gold futures were up 0.3% at $1,788.10.

Pessimism about medium-term economic outlook was supporting gold prices, said Nicholas Frappell, global general manager at ABC Bullion.

"However, the market is struggling somewhat with concerns over the timing over tapering," he added.

Asian shares were headed for their lowest close since November and worst week since February.

Limiting gains in the bullion, rival safe haven dollar held near a more than a nine-month high benefiting from coronavirus anxiety and expectations the U.S. Federal Reserve could start to taper stimulus this year.

"As we head into Jackson Hole, some of those corrective gains that we saw in gold are likely to get retraced," said DailyFX currency strategist Ilya Spivak.

At a Federal Reserve symposium next week in Jackson Hole, Wyoming, U.S. central bank chief Jerome Powell will speak on "the economic outlook", when he is expected to lay out a clearer roadmap on plans for tapering.

The markets are positioning for the Fed to continue to build on the narrative that tapering is becoming imminent and a formal announcement could be made as soon as this September, Spivak added.

Gold is viewed as a hedge against inflation and currency debasement. The Fed's tapering would tackle both those conditions thereby diminishing gold's appeal.

Silver was steady at $23.24 per ounce and headed for a third straight weekly decline.

Platinum rose 0.9% to $981.69, but it was down more than 4% for the week.

Palladium gained 1.2% to $2,339.92 but it was headed for its worst week since March 2020, falling nearly 12%.