**Factors Influencing Gold Prices** Gold prices in Pakistan increased on Friday, reaching 39,537.74 Pakistani Rupees (PKR) per gram, up from 39,220.21 PKR on Thursday. The price per tola also rose to 461,159.90 PKR, compared to 457,456.90 PKR the previous day. Gold is often viewed as a safe investment amid economic uncertainty and expectations of interest rate cuts. Recently, the trade tensions between the US and China and the extended shutdown of the US government have heightened demand for gold. Additionally, ongoing geopolitical tensions in Eastern Ukraine have also contributed to this rise. Federal Reserve Chair Jerome Powell has expressed a softer approach to interest rates, suggesting possible cuts in upcoming meetings. This stance has put downward pressure on the US Dollar, making gold more attractive. FXStreet updates gold prices in Pakistan by adjusting international rates to reflect local market conditions. During uncertain times, gold is still a trusted investment and is often used to protect against inflation. Central banks are significant holders of gold, having added 1,136 tonnes in 2022, marking the largest annual purchase ever. Gold prices can be affected by geopolitical issues, interest rates, and currency changes, typically moving in the opposite direction of the US Dollar. Looking back, the strength of gold was supported by geopolitical risks and predictions of a Federal Reserve shift. As of October 17, 2025, with gold trading near $2,450 an ounce, many of these themes still apply, albeit in different forms. Traders should prepare for ongoing price volatility in this precious metal. **Market Outlook for Gold** The Federal Reserve has started an easing cycle, but recent data has complicated the future outlook. The September 2025 job report showed only 150,000 jobs added, indicating a slowing labor market, while core inflation remains stubbornly high at 3.1%. This uncertainty creates support for gold, as it limits how high real interest rates can rise. While geopolitical risks have shifted, they have not disappeared, providing ongoing support for gold prices. Even though the major conflict in Ukraine has decreased following the 2024 accords, tensions have escalated in the South China Sea. This ongoing need for safe-haven assets keeps strategic buyers interested in gold. For derivative traders, this climate suggests that buying protection or speculating on further gains is a smart strategy. Recently, there has been a 15% increase in open interest for December 2025 gold futures call options with a $2,500 strike price, reflecting bullish market sentiment. Strategies like bull call spreads could help traders capture potential profits while managing their risk. The US Dollar continues to play a crucial role, and its recent behavior shows the market’s uncertainty. The Dollar Index (DXY) has been fluctuating within a narrow range around 103, as economic weakness is countered by high inflation. A decisive move in the dollar will likely impact gold prices significantly, making currency derivatives essential to monitor for hedging gold positions. Create your live VT Markets account and start trading now.

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