Gold prices in Pakistan rose on Friday, as reported by FXStreet. The price for a gram of gold reached 38,033.10 Pakistani Rupees (PKR), up from 37,769.22 PKR on Thursday. The cost for a tola also increased to 443,610.70 PKR from 440,532.80 PKR the day before. FXStreet calculates gold prices in Pakistan by matching international rates (USD/PKR) with the local currency.

Gold As A Hedge Against Inflation

Gold is viewed as a safe investment during economic uncertainty. It acts as a hedge against inflation and currency decline. Central banks hold the most gold, purchasing 1,136 tonnes in 2022, worth about $70 billion, according to the World Gold Council. This was the highest annual amount recorded. Countries like China, India, and Turkey are quickly increasing their gold reserves. Gold prices often move in the opposite direction of the US Dollar and US Treasuries. A falling Dollar typically drives up gold prices, while rising stock markets can pull them down. Price changes can also result from global tensions or fears of a recession. Interest rates and the strength of the Dollar are important factors since gold is priced in dollars (XAU/USD).

Traders And Market Trends

The recent rise in gold prices in Pakistan mirrors a broader global trend. With ongoing concerns about a worldwide economic slowdown extending into 2026, gold’s status as a safe-haven investment becomes even more crucial. Traders should keep in mind the steady demand from investors seeking security amid market instability. We are witnessing a major shift in expectations around monetary policy, which affects gold prices directly. The CME FedWatch tool indicates over a 70% chance of a rate cut by the U.S. Federal Reserve in the first quarter of 2026, prompted by slowing economic data. Historically, lower interest rates reduce the cost of holding non-yielding gold, making it more appealing. Traders should note the inverse relationship between gold and the US Dollar. Expectations of lower U.S. interest rates have driven the DXY index down nearly 4% over the past quarter. A weaker Dollar makes gold, which is priced in USD, more affordable for buyers using other currencies, potentially increasing international demand. We must also consider the strong demand from central banks. This trend has picked up since the record purchases in 2022. The World Gold Council reported that central banks, especially in emerging markets, added another 250 tonnes to their reserves in the third quarter of 2025. This consistent buying helps support gold prices and indicates a long-term shift away from relying solely on the Dollar. In this context, traders might explore strategies designed to profit from upward price movements and potential volatility. Purchasing call options on gold futures or ETFs could provide a way to benefit while limiting downside risk to the premium paid. We have noticed that implied volatility for gold options has reached a 6-month high, suggesting that the market is anticipating larger price fluctuations in the coming weeks. Create your live VT Markets account and start trading now.

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