Gold prices fell in Pakistan on Friday. A gram of gold cost 36,249.68 Pakistani Rupees, down from 36,416.39 Rupees the day before. The price per tola decreased to PKR 422,812.00, down from PKR 424,753.70. FXStreet calculates gold prices by adjusting international rates to the local currency.

Impact of the US Dollar and Ceasefire

The recent rise of the US Dollar has affected gold prices. Additionally, a ceasefire between Israel and Hamas has impacted the market, along with ongoing inflation concerns highlighted by Federal Reserve Chair Jerome Powell. A drop in US borrowing costs and global conflicts also influence gold prices. Tensions in Ukraine and potential government shutdowns add to the market’s uncertainty. Geopolitical tensions help maintain gold’s reputation as a safe-haven asset. Central banks continue to hold significant quantities of gold, increasing their reserves. Gold prices typically move in the opposite direction of the US Dollar and US Treasuries. It serves as a hedge against inflation and tends to increase when interest rates lower. Investors view gold as a stable investment, with its value affected by various factors, including geopolitical issues and currency strength.

Profit Opportunities Amid Volatility

Gold has pulled back from its recent highs primarily due to the strength of the US Dollar. This move seems more like profit-taking than a shift in trend, setting up a tense situation for the upcoming weeks. This dip could be an opportunity since several supportive factors remain for gold. The market is closely watching the Federal Reserve, with many expecting two more interest rate cuts by the end of 2025. Recent economic data backs this expectation. The September jobs report showed slower hiring and an increase in the unemployment rate to 4.1%. This cooling labor market supports the idea that the Fed might lower borrowing costs, which is usually positive for gold. Geopolitical risks are creating mixed signals in the market. The ceasefire between Israel and Hamas has reduced some immediate safe-haven demand, but ongoing US government shutdowns and escalating Russian attacks on Ukraine continue to support gold prices. We believe these conflicting events will lead to fluctuating prices and increased volatility. In this uncertain environment, options strategies that profit from price swings might be effective. Traders could consider buying straddles or strangles to benefit from significant moves—whether upward or downward—without needing to predict the direction of the next price change from news. For those with a positive long-term outlook, this current dip seems like a good chance to invest. Gold surged in late 2023 when the market anticipated 2024 rate cuts, and a similar situation appears to be developing now. Buying call options with expiration dates in December 2025 or January 2026 could position investors for a year-end rally driven by Fed policies. Create your live VT Markets account and start trading now.

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