Gold prices in Pakistan increased on Wednesday. The price per gram rose to 37,806.84 Pakistani Rupees (PKR), compared to 37,522.28 PKR the previous day. The price per tola also climbed to 440,970.50 PKR from 437,652.50 PKR. A troy ounce of gold was valued at 1,175,945.00 PKR.

Influence Of Currency And Economic Activity

Gold’s rise was influenced by comments from Powell, head of the Federal Reserve. Powell noted that recent data showed stronger economic activity and highlighted increasing risks to the labor market and inflation. Elevated inflation is linked to rising goods prices, reflecting tariffs instead of widespread inflationary pressures. The US Dollar Index fell by 0.25%, helping to push up gold prices. Meanwhile, the yield on the US 10-year Treasury note decreased by three basis points. In Pakistan, gold prices are determined by adjusting international prices to the local currency and units. Central banks are the largest buyers of gold, making significant purchases in 2022 to strengthen their economies and currencies. Gold prices usually rise when the US Dollar weakens because gold and the Dollar have an inverse relationship. Factors like geopolitical tensions and interest rates also affect gold prices. Gold prices are holding strong, largely due to Powell’s comments and a weakening US Dollar. Powell’s remarks suggest little has changed, leading the market to believe that rate hikes are unlikely for now. This environment is usually beneficial for gold, which does not yield returns.

Market Expectations And Predictions

Markets are adjusting their expectations. The CME FedWatch tool now shows a greater than 60% chance of a rate cut by March 2026. This change follows the latest CPI report for September 2025, which indicated inflation easing slightly to 3.1%, allowing the Fed to pause its rate hikes. The caution from the central bank is notable after the aggressive rate increases in 2022 and 2023. The drop in US Treasury yields reinforces this outlook. The 10-year yield has recently fallen below 4.00%, making gold more appealing. Broader economic uncertainty also contributes, with recent data pointing to a slowdown in global trade, especially from Europe and China. We’ve seen similar tendencies during times of high uncertainty, like the trade policy shifts under the Trump administration. For derivative traders, this suggests maintaining a long position on gold, possibly using call options to take advantage of potential price increases while managing risk. A key event to watch for is the CPI release on October 24. If inflation comes in lower than expected, gold prices may rise even further, reinforcing expectations of a more dovish Fed. Create your live VT Markets account and start trading now.

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