* 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 XAU= 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 GCv1 dropped 0.3% to $1,941.30 per ounce.
The dollar rose 0.1%, making gold less attractive to other currency holders. USD/
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. 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. 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. XAG= fell 0.5% to $25.19. Platinum XPT= dropped 0.1% to $891.70, while palladium XPD= gained 0.4% to $2,386.27.
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