Gold prices in Pakistan fell on Monday. The price per gram decreased to 40,666.05 Pakistani Rupees (PKR) from 40,814.31 PKR on Friday. The cost for one tola also went down, dropping to 474,316.10 PKR from 476,050.10 PKR. In troy ounces, the price was recorded at 1,264,854.00 PKR. FXStreet adjusts international gold prices to reflect PKR and local measurement units based on current market rates.

Gold As A Hedge Against Inflation

Gold continues to be a safe investment, especially during uncertain economic times. It’s seen as a good protection against inflation, regardless of country governance. Central banks are major buyers of gold, looking to diversify their reserves. In 2022, they bought 1,136 tonnes worth around $70 billion, with countries like China, India, and Turkey increasing their gold holdings. Gold prices usually move opposite to the US Dollar and US Treasuries. Events like geopolitical tensions or economic downturns can affect gold prices. Generally, when the dollar weakens, gold’s value tends to rise. The recent small drop in gold prices isn’t viewed as a weakness but rather a possible buying opportunity. Current market trends are influenced by larger economic forces, so this dip could be a chance to make strategic investments. It’s important to consider this decrease in the context of ongoing global economic patterns as we approach 2026. The Federal Reserve’s policies largely influence gold prices, and we are carefully observing their actions. After several rate cuts in 2024 that brought the Fed Funds rate down to 4.25%, recent inflation data led to a pause, creating uncertainty. This caution from the central bank often drives interest in non-yielding assets like gold, as traders look for safety in unclear monetary policies.

Central Bank Demand For Gold

We must recognize the steady demand from central banks, which has supported gold prices for many years. Following record purchases in 2022 and 2023, banks, especially in Asia, have continued to increase their reserves throughout 2025. In Q3, global net purchases exceeded 250 tonnes. This ongoing demand suggests that significant price drops will likely be brief as large institutions buy in. The relationship between gold and the US Dollar is crucial right now. The Dollar Index (DXY) has hovered around 101, weakened by uncertainties regarding the Fed’s next steps. Our experiences during the geopolitical challenges of 2023 and 2024 show that a weaker dollar coupled with global instability boosts precious metals. Given these conditions, we expect gold market volatility to rise in the upcoming weeks. We’re considering options strategies like buying call spreads to benefit from potential gains while minimizing risk. For those looking for bigger movements, a long straddle could be advantageous to profit from significant price changes in either direction before major economic data is released in January. Create your live VT Markets account and start trading now.

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