Gold Remains a Safe-Haven Asset Current Gold Prices: – 1 gram: 43,773.67 PKR – 10 grams: 437,672.30 PKR – 1 tola: 510,584.80 PKR – 1 troy ounce: 1,361,509.00 PKR FXStreet reports these prices by adjusting international rates daily for local markets. Gold is commonly used to store value and conduct transactions. It’s considered a safe-haven asset, protecting against inflation and currency decline since it’s not linked to any government or issuer. Central banks buy gold to back their currencies. In 2022, they set a record by purchasing 1,136 tonnes. Countries like China, India, and Turkey are also increasing their gold reserves. Gold prices often move in the opposite direction of the US Dollar and US Treasuries. Prices rise during geopolitical instability or recession fears and fall when interest rates are high. Since gold is priced in dollars, its value is closely related to the dollar’s performance. **Current Market Dynamics** As of January 21, 2026, gold prices appear to have a supportive setup. The market is anticipating interest rate cuts from the US Federal Reserve in the first half of the year, making yield-bearing assets like bonds less attractive. This shift enhances the appeal of gold, which provides no yield. The performance of the US Dollar is crucial, and its recent weakness is boosting gold prices. The Dollar Index (DXY) is around the 101 level, significantly lower than its highs over the past two years. This decline makes gold cheaper for those using other currencies. We expect this softer dollar trend to continue if the market anticipates looser monetary policy. Demand for gold remains strong as a hedge against ongoing geopolitical issues and fears of a slowdown in global economic growth. Recent volatility in major stock indices has prompted investors to seek safety, benefiting precious metals. This defensive approach should help support gold prices in the coming weeks. Looking back, the record gold purchases by central banks in 2022 have continued. Central banks, especially in emerging markets, added to their gold reserves throughout 2024 and 2025 to diversify away from the US dollar. This consistent buying creates strong demand, limiting the risk of price drops. For traders, the current environment suggests that long positions in gold futures could be a good option. Purchasing call options that expire in two to three months allows for potential price gains while managing risks. Look for dips near the $2,350 per ounce level as potential entry points for these strategies. Create your live VT Markets account and start trading now.

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