Gold prices in Pakistan went up on Monday, according to FXStreet data. The price per gram rose from PKR 37,862.34 on Friday to PKR 37,928.75. The price per tola also increased, moving to PKR 442,400.90 from PKR 441,618.90. FXStreet updates international gold prices to PKR and local units every day. Central banks hold the most gold, adding 1,136 tonnes in 2022, worth around $70 billion. Gold is seen as a safe investment during uncertain times. Gold’s value usually goes up when the US Dollar weakens and goes down when interest rates rise. Geopolitical issues and fears of recession can push gold prices higher. A strong dollar generally keeps gold prices stable, while a weak dollar tends to raise them. Gold serves as a shield against inflation and currency devaluation. It doesn’t depend on any government or issuer, which makes it an appealing investment during uncertain periods. With expectations for a Federal Reserve rate cut later this month, the US Dollar is weakening a lot. This is beneficial for gold, since it is priced in dollars and usually rises when the dollar falls. Traders dealing in derivatives should think about positioning for continued dollar weakness in the weeks ahead. The latest inflation figures from November 2025 show a drop in the Consumer Price Index to 2.8%. This supports the idea that the Fed may ease its monetary policy. This marks a big shift from the aggressive rate hikes we saw in 2023. Lower interest rates make it easier to hold non-yielding assets like gold, making it more appealing. We’re also seeing strong and ongoing purchases from central banks, a trend that has been growing for years. The World Gold Council noted that another 250 tonnes were added to global reserves in the third quarter of 2025, with emerging economies leading in purchases. This strong demand from institutions helps stabilize gold prices. Continuing geopolitical tensions and concerns over global supply chains are pushing investors toward safe-haven assets. This steady demand supports gold during uncertain market times, likely limiting any major price drops. Given this situation, buying call options on gold futures expiring in January or February 2026 might be a good strategy to benefit from the expected price rise. However, silver has recently performed well, reaching new highs while gold has not. This could mean gold has potential to rise or signal caution for the entire precious metals market. The focus will be on the Federal Reserve’s statement later this month. If the tone is more dovish than expected, it could lead to a price rally. Traders should use options to manage their risk, as a surprise hawkish position from the Fed might cause a quick reversal, pushing the dollar up and gold prices down.

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