Gold prices inched up on Friday, as rising concerns over the spread of coronavirus Delta variant and its impact on economic recovery soured risk sentiment, but a stronger dollar capped further gains.

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Spot gold rose 0.2 percent to USD 1,784.07 per ounce by 352 GMT, and is up about 0.3 percent for the week. US gold futures were up 0.3 percent at USD 1,786.10.

"Risk aversion means that capital is going into the safety of bonds, which is pulling down on yields and so yields haven't really moved very much and of course that conflicted influence is likewise reflected in gold," said DailyFX currency strategist Ilya Spivak.

Asian shares extended losses, while the dollar held near a more than nine-month high on Thursday.

A stronger dollar makes the greenback-denominated gold more expensive for holders of other currencies.

"As we head into Jackson Hole, some of those corrective gains that we saw in gold are likely to get retraced," Spivak said, adding, the markets are positioning for the Federal Reserve to continue to build on the narrative that the tapering is becoming imminent and a formal announcement could be made as soon as this September.

Fed Chair Jerome Powell will speak on "the economic outlook" at next week's Jackson Hole, Wyoming symposium, where he is expected to lay out a clearer roadmap on the central bank's taper plans.

Fed's July policy meeting minutes showed officials were largely on board to start easing bond purchases this year if the economy continues to improve as expected.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell to a 17-month low last week.

Silver eased 0.1 percent to USD 23.22 per ounce and was headed for third straight weekly decline.

Platinum rose 0.6 percent to USD 979.50, but it is down over 4 percent for the week.

Palladium gained 0.7 percent to USD 2,328.91. The metal was headed for its worst week since March 2020 falling 12 percent.