Gold prices firmed on Wednesday, as escalating concerns over the economic fallout from the spread of the coronavirus' Delta variant dented sentiment towards riskier assets, lifting bullion's appeal.

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Spot gold rose 0.3 percent to USD 1,791.67 per ounce by 0314 GMT, hovering below a more than one-week high of 1,795.25 hit on Tuesday.

US gold futures were up 0.3 percent to USD 1,793.30.

"The elephant in the room is this Delta variant and whether it does materially affect the global recovery. In that situation, gold is likely to find more haven buying," said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA.

Asian shares held near year-to-date lows as the Delta variant continued to sweep through the region.

Also hinting at a slowdown in the economy, US retail sales fell more than expected in July.

Investors now await the minutes from Federal Reserve's July meeting later in the day for guidance on its tapering plans.

"Gold's fate will be decided by the FOMC and whether they signal imminent tapering in September. If that leads to a higher dollar and US yields gold is likely to fall back below USD 1,700," Halley added.

On Tuesday Minneapolis Fed President Neel Kashkari said it could be "reasonable" to start tapering later this year, but will depend on progress in the labour market.

Fed chief Jerome Powell said it remains unclear whether the heightened outbreak of the Delta variant will have a noticeable impact on the economy.

The dollar index held near recent peaks on other majors.

Gold often competes with the dollar as a safe store of value during political and financial uncertainties, with a higher dollar also making gold more expensive for those holding other currencies.

Silver rose 0.7 percent to USD 23.79 per ounce, while platinum rose 1.3 percent to USD 1,009.67.

Palladium rose 1.2 percent to USD 2,519.18, bouncing off near a two-month trough hit on Tuesday.

First Published:Aug 18, 2021 11:25 AM IST