Gold prices in Pakistan rose on Tuesday. According to FXStreet, the price increased from 41,973.93 PKR per gram on Monday to 42,131.74 PKR per gram. The price per tola also went up to 491,407.40 PKR from 489,575.80 PKR. FXStreet sets gold prices by adjusting global rates (USD/PKR) to the local currency and units, with daily updates. These numbers are just for reference, and actual local prices may differ.

Central Banks and Gold Reserves

Gold is considered a safe asset, especially during uncertain times, and is often used by central banks to support economies. The World Gold Council reported that central banks added 1,136 tonnes, valued at about $70 billion, to their reserves in 2022. Gold prices often rise when the US Dollar weakens; they are inversely related. In times of geopolitical unrest or fears of recession, gold prices can increase. Conversely, when interest rates are high, gold prices typically decline. The value of gold heavily depends on the strength of the US Dollar—a weaker Dollar increases gold’s value. Currently, gold prices are strong, reflecting a global upward trend. This rise aligns with gold’s role as a safe investment during uncertain times. Derivative traders should pay attention to this ongoing bullish trend. Central banks have been buying heavily, a trend that intensified after they added a record 1,136 tonnes in 2022. The World Gold Council’s data for the fourth quarter of 2025 shows that global central banks added another 290 tonnes, with nearly one-third attributed to the People’s Bank of China. This strong institutional demand underpins gold prices.

Geopolitical Instability and Market Volatility

The ongoing geopolitical instability from 2025 has been a key driver of this rally. This uncertainty is increasing volatility in equity markets, leading more investors to seek the safety of gold. We can expect this trend to continue in the near future. Paying attention to the US Dollar and Federal Reserve policies is crucial. The recent US CPI data for December 2025 showed a slight dip to 3.9%, fueling discussions about the Fed possibly pausing rate hikes. A dovish shift would likely weaken the Dollar and further support gold prices. With the strong upward trend in gold prices, traders should consider strategies that benefit from rising prices. Buying call options on gold futures or gold ETFs can provide leveraged exposure to potential price increases while managing risks. These positions could be advantageous if gold exceeds recent highs around $4,700 per ounce. For those seeking to manage costs in this volatile environment, bull call spreads are an appealing option. This strategy allows investors to benefit from a moderately bullish outlook while limiting potential profit and the initial premium paid. It’s a smart way to engage in the rally with a clearer risk-reward profile. Create your live VT Markets account and start trading now.

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