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PRECIOUS-Gold dips as dollar firms, but set for best week in over 3 months

    * Asian shares at 3-yr peak, dollar gains
    * Silver set for best week since early Aug 

 (Updates prices)
    By Nakul Iyer
    Nov 6 (Reuters) - Gold fell on Friday, as the dollar gained,
but was set for its best week since late July on hopes for more
central bank economic support as investors bet on a divided U.S.
Congress under a Joe Biden presidency.
    Spot gold        fell 0.3% to $1,942.25 per ounce by 0731
GMT. Prices soared 2.4% on Thursday on a dollar slide, setting
them up for a 3.5% weekly gain.
    U.S. gold futures        dropped 0.3% to $1,941.30 per
ounce.
    The dollar rose 0.1%, making gold less attractive to other
currency holders.       
    Over the last week, the gold market's dynamic has shifted
from a stimulus hedge to just being a play on the dollar "and
that trade has unwound a bit", said IG Markets analyst Kyle
Rodda.  
     "Once we see the dust settle in the election it's going to
go back to being driven by fiscal policy."
    Democrat Biden edged closer to victory but votes were still
being counted in key states.             
    "The U.S. election seems likely to give us a Democrat
President and Republican Senate, maintaining the status quo on
policy and that has allowed markets to get back to the real
issue of 2020 - central bank easing on a huge scale," Jeffrey
Halley, senior market analyst at OANDA. 
    But prospects of a divided Congress dimmed chances for
immediate stimulus, driving expectations the Fed might need to
fill the gap.                          
    "Is there enough fiscal stimulus to trigger the inflation
aspect for gold to rise to $2,000 again? Ultimately that's going
to happen but this is where the uncertainty lies," said Stephen
Innes, chief global market strategist at financial services firm
Axi.
    Near-zero interest rates amid massive pandemic-driven
stimulus globally have helped non-yielding gold, considered an
inflation hedge, gain 28.1% this year.                          
    Silver        fell 0.5% to $25.19. Platinum        dropped
0.1% to $891.70, while palladium        gained 0.4% to
$2,386.27. 
   

    
 (Reporting by Nakul Iyer in Bengaluru and Eileen Soreng;
Editing by Krishna Chandra Eluri)
  
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