Gold prices in Pakistan fell on Monday, FXStreet data showed. The metal traded at PKR 40,426.34 per gram, down from PKR 40,642.90 on Friday, while the per tola rate slipped to PKR 471,524.90 from PKR 474,050.80. On the same pricing basis, FXStreet put 10 grams at PKR 404,262.90 and a troy ounce at PKR 1,257,412.00.
FXStreet derives local gold prices by converting international benchmarks through the USD/PKR rate and applying domestic measurement units, with figures updated daily at the publication-time market rate; the firm said the numbers are indicative and local quotes may vary. Separately, World Gold Council data cited in the note showed central banks added 1,136 tonnes of gold worth around $70 billion in 2022, described as the highest annual purchase since records began.
Global Drivers Outweigh Local Price Fluctuations
We see the minor price drop in gold, as reflected in local Pakistani markets, as short-term noise. The bigger picture for us is driven by the actions of central banks and the outlook for the US dollar. These global factors will have a far greater impact on price in the coming weeks than daily local fluctuations.
The key driver is the Federal Reserve’s recent signal to pause its interest rate hiking cycle, which makes a non-yielding asset like gold more attractive. With the CME FedWatch Tool now indicating a 48% probability of a rate cut by the end of the fourth quarter, the opportunity cost of holding gold is decreasing. This shift in monetary policy is a significant tailwind for the metal.
At the same time, inflation remains a concern, with the latest global Consumer Price Index (CPI) figures for April 2026 coming in at a persistent 3.2%, slightly above expectations. This environment of sticky inflation alongside a less aggressive central bank stance is putting pressure on the US Dollar. The Dollar Index (DXY) has subsequently fallen to a three-month low of 102.50, creating a supportive base for gold priced in dollars.
Central Bank Buying and Market Outlook
We also note the continued, aggressive purchasing by central banks, a trend that has been building for years. The World Gold Council’s latest report confirms that central banks collectively bought a net 298 tonnes in the first quarter of 2026, marking the strongest start to a year on record. This consistent demand from major players like China and India provides a strong floor under the market, limiting downside risk.
Geopolitical instability and equity market volatility are also underpinning gold’s role as a safe-haven asset. With the VIX, a measure of stock market fear, climbing above 17 in late May, we are seeing asset allocators increase their exposure to gold as a hedge. This defensive positioning is likely to continue as long as market uncertainty persists.
Given these factors, we are viewing any price dips toward the $2,310 per ounce level as strategic buying opportunities for the weeks ahead. We are advising traders to consider using call options on gold futures to gain upside exposure while defining their risk. We see a realistic path for gold to re-test the $2,420 level before the end of the third quarter.
