Gold prices firmed above the key $1,800 level on Tuesday as the U.S. dollar weakened following China'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 slipped 0.3% against its rivals as risk sentiment improved on news of China relaxing quarantine rules. The American currency and gold compete as rival safe-haven assets.

Gold has gained nearly $200 after falling to a more than two-year low in late September, as expectations about slower interest rate hikes from the U.S. Federal Reserve dimmed the dollar'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 gold's anti-inflationary 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 much easier for people to return home.

"As China's pivot away from COVID zero filters through the world's second largest economy, that should result in restored appetite for bullion," Tan added.

In other metals, spot silver rose 2.1% to $24.22 per ounce, platinum added 0.8% to $1,029.63.

Palladium climbed 1.2% to $1,785.63.

(Reporting by Arundhati Sarkar and Ashitha Shivaprasad in Bengaluru; Editing by Vinay Dwivedi)