.DXY down 0.3
China to drop quarantine rule for inbound travellers
China optimism to restore appetite for gold analyst

Dec 27 Reuters Gold prices firmed above the key 1,800 level on Tuesday as the U.S. dollar weakened following China39;s decision to ease COVID curbs.

Spot gold was up 0.6 at 1,808.89 per ounce by 0955 GMT. U.S. gold futures climbed 0.8 to 1,817.60.

Gold is performing in line with risk assets, and further signs that king dollar is loosening its grip on the safe haven throne is also encouraging bullion bulls to restore spot prices back above the psychological 1,800 mark, said Han Tan, chief market analyst at Exinity.

The dollar index . The American currency and gold compete as rival safehaven assets.

Gold has gained nearly 200 after falling to a more than twoyear low in late September, as expectations about slower interest rate hikes from the U.S. Federal Reserve dimmed the dollar39;s allure.

Gold was weaker for most of 2022 amid aggressive tightening of monetary policies, rising real yields and dollar strength. But the tide has turned as Fed shifts into policy calibration mode, said OCBC FX strategist Christopher Wong.

Sustained recovery in gold prices is possible if Fed pivots.

Higher rates diminish gold39;s antiinflationary appeal and increase the opportunity cost of holding the asset as it pays no interest.

China announced on Monday that inbound travellers would no longer have to go into quarantine from Jan. 8 and the new rule will make it…