* Asian shares hit two-month low * Silver heads for weekly decline * China’s June auto sales fall 12.4% (Recasts, adds analyst comment, updates prices) July 9 (Reuters) - Gold edged higher in choppy trade on Friday and was set for a third straight weekly gain as concerns over the fast-spreading Delta variant of COVID-19 and a drop in U.S. Treasury yields lifted the safe-haven metal’s allure. Spot gold was up 0.1% at $1,803.92 an ounce by 0725 GMT, up 0.9% on the week. U.S. gold futures rose 0.1% to $1,802.10. Lower bond yields and concern over the COVID-19 Delta variant’s potential impact on global growth are helping gold, said Stephen Innes, managing partner at SPI Asset Management. “However, the dollar is holding up to a large degree and I think that in itself is limiting gold’s move,” he added. Benchmark U.S. 10-year Treasury yields languished near a more than four-month low while the U.S. dollar rose 0.1% towards a three-month high hit in the previous session. Sentiment in wider equity markets remained fragile as the Delta variant threatened global economic recovery, sending Asian shares to a two-month low. Minutes from the U.S. Federal Reserve’s June policy meeting released on Wednesday showed that while the economic recovery “was generally seen as not having yet been met”, Fed officials agreed they should be poised to act if inflation or other risks materialised. Fears over imminent monetary policy tightening by the Fed have weighed on bullion, sending gold down 7% in June. “The key psychological $1,800/ounce level is acting as a barrier for gold. Once it sustains above that for some time, we could see some fresh technical buying,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus. Elsewhere, palladium edged 0.1% higher to $2,809.18 an ounce while platinum was steady at $1,075.02. Silver eased 0.1% to $25.88, on course for a weekly decline. (Reporting by Brijesh Patel in Bengaluru Editing by Uttaresh.V and David Goodman ) Our Standards: The Thomson Reuters Trust Principles.