Gold prices gained on Friday, as concerns over the spread of a newly identified coronavirus variant boosted the metal’s safe-haven appeal, although bullion was set for a weekly drop on growing bets the US Federal Reserve could turn more hawkish.

Spot gold was up 0.5% at $1 797.46/oz, as of 04:45 GMT. US gold futures advanced 0.8% to $1 797.70.

The variant, detected by scientists in South Africa, may be able to evade immune responses and has prompted Britain to hurriedly introduce travel restrictions on the African nation.

Further aiding gold’s climb, the dollar index eased 0.2% from a 16-month peak scaled earlier this week, while US benchmark 10-year Treasury yields also weakened.

A weaker dollar reduces gold’s cost to buyers holding other currencies, while lower yields decrease the non-yielding metal’s opportunity cost.

But the metal lost 2.6% so far this week, heading for its worst week since August 6, hammered by increased expectations that the Fed could taper its asset purchases and raise interest rates at a faster pace.

“A rate hike cycle is generally negative for gold, but we have to keep an eye on this new Covid variant – if it spreads to the United States, that could weaken growth and I can’t see the Fed hiking rates in that environment,” Stephen Innes, managing partner at SPI Asset Management said.

However, Covid-related growth concerns and the prospect for quicker US rate hikes should weaken riskier currencies and ultimately support the dollar, hurting gold, Innes added.

Goldman expects the Fed to double the pace of tapering its monthly bond purchases from January to $30-billion, and end those purchases by mid-March.