The most common and most likely answer to this crossword clue is the 8 letter word GOODNESS
I've seen this crossword clue in The Times
G
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Buddy explains!

The straight part
We know that "Gracious/virtue" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case gracious/virtue = goodness.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does GOODNESS mean?
GOODNESS noun- The state or characteristic of being good.
- The good, nutritional, healthy part or content of something.
- God.
- The moral qualities which constitute Christian excellence; moral virtue.