Gold prices in Pakistan have gone up, according to FXStreet. The price for one gram reached 45,105.93 Pakistani Rupees (PKR), rising from 44,363.37 PKR last Friday. The price per tola also increased to PKR 526,122.30 from PKR 517,445.70. These numbers are based on daily updates that adjust international prices to PKR. While they provide a general reference, local prices may vary. Gold is often seen as a safe asset and a way to preserve value.

The Role of Central Banks

Gold is highly valued during uncertain times and is used as protection against inflation and currency decline. Central banks hold the most gold, which helps strengthen currencies and boost economic confidence. In 2022, they purchased 1,136 tonnes of gold, the highest amount ever recorded in a single year. Gold prices typically rise when the US Dollar falls. They tend to increase with lower interest rates and during geopolitical turmoil. The value of gold mainly depends on the US Dollar: it goes up when the dollar weakens and stabilizes when the dollar is strong. Given the economic uncertainty we faced in 2025, gold is once again seen as a safe asset. The rising price indicates that people are seeking safety due to ongoing concerns about inflation that have continued into the new year. This situation presents clear trading opportunities based on market volatility in the weeks ahead.

Impact of the US Dollar and Interest Rates

We need to closely monitor central banks, as they are significant buyers of gold. Following their record purchases in 2022 and 2023, these banks have continued to increase their reserves throughout 2025. The latest data from the World Gold Council shows that this trend is steady, providing strong support for gold prices and favoring long-term investments. The relationship between gold and the US Dollar is crucial for our strategies. As the Federal Reserve hints at a less aggressive approach to interest rates compared to 2023 and 2024, the dollar has begun to weaken. This suggests that buying call options on gold futures could be a smart move, anticipating further declines in the dollar. We should also keep an eye on risk assets like stocks. The poor performance of major stock indices in the last quarter of 2025 shows that investors are cautious. Any more declines in the stock market could lead to a further spike in gold prices. Geopolitical instability continues to be a significant but unpredictable factor influencing gold prices. Ongoing tensions keep the market anxious, making volatility strategies, like straddles, potentially profitable. Even rumors of new conflicts can quickly cause price surges, so we need to be ready to respond. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now