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PRECIOUS-Gold battles dollar as virus fears dampen risk appetite

* Palladium eyes worst week since March 2020

* Silver on track for third straight week of declines

* Dollar hits 9-1/2-month high (Adds market details, updates prices)

Aug 20 (Reuters) - Gold was little changed on Friday, with gains curbed by a stronger dollar, while growing concerns over a global economic slowdown due to a spike in COVID-19 infections underpinned the safe-haven metal.

Spot gold was up 0.1% at $1,782.45 per ounce by 1:56 p.m. EDT (1756 GMT). U.S. gold futures settled up 0.1% at $1,784 per ounce.

“We do have a two-sided market at the moment. The dollar has been relatively strong of late as a result of this expectation that the Fed will move towards tapering, based on recent commentary,” said David Meger, director of metals trading at High Ridge Futures.

“Other side, we still believe there’s an underlying support in this gold market right now. We’re starting to see some drags from Delta on the global economic recovery.”

Worries over a slowing economic recovery and possible tapering from the U.S. Federal Reserve dented appetite for riskier assets.

But the dollar also benefited from safe-haven interest, pushing the currency to a 9-1/2-month high, making gold more expensive for other currency holders.

Against the backdrop of recent tapering hints from the U.S. central bank, the spotlight shifts to the Fed’s annual get-together next week in Jackson Hole, Wyoming, which could shed further light on monetary strategy and timeline.

“As soon as the Fed announced that it will start to reduce its bond purchases, an important obstacle for the gold price should disappear,” Commerzbank analysts said in a note.

“During the further course of the year it should benefit from the comparatively cheap valuation of gold and the (record low) real yields.”

Elsewhere, silver fell 0.8% to $23.05 per ounce, en route to a third straight weekly decline.

Palladium dropped 1.6% to $2,276.17 and was on course for its worst week since March 2020, falling about 14%.

Platinum jumped 2.1% to $994.18, but was down 3% for the week. (Reporting by Brijesh Patel in Bengaluru, Additional reporting by Swati Verma in Bengaluru Editing by Marguerita Choy and Matthew Lewis)

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