Gold prices in Pakistan rose on Tuesday, according to FXStreet data. The price per gram went up to 45,489.42 Pakistani Rupees (PKR) from 45,425.48 PKR the day before. The price for one tola increased to 530,584.40 PKR, up from 529,833.90 PKR. FXStreet determines local gold prices based on global values, factoring in the USD/PKR exchange rate. Although local prices change daily, they may differ slightly. Gold is often seen as a safe investment, a way to preserve wealth, and a shield against inflation, especially during tough times.

Central Banks and Gold Reserves

Central banks play a major role in the gold market, buying 1,136 tonnes worth about $70 billion in 2022. Countries like China, India, and Turkey are significantly increasing their reserves. Gold typically rises when the US Dollar and US Treasuries fall. Factors such as geopolitical tensions and economic conditions can impact its price, with lower interest rates usually boosting gold’s value. The recent rise in gold prices shows its importance as a safeguard against currency decline. This is clear as the US Dollar weakened after the Federal Reserve cut interest rates twice in the last quarter of 2025. In this scenario, holding gold, which doesn’t yield interest, becomes more appealing to investors. Continuous buying from central banks helps maintain strong gold prices. In 2025, they added over 1,000 tonnes of gold for the third consecutive year, especially countries like China that aim to reduce reliance on the dollar. This steady demand is important for long-term investment strategies. We also need to consider the ongoing inflation, which was around 3.1% in the US at the end of 2025, higher than the central bank’s target. This persistent inflation, along with slower global growth, makes gold more attractive as a safe investment. The market is factoring in uncertainty, which typically benefits gold prices.

Strategies for Traders

For traders using derivatives, buying call options or call spreads could be smart strategies to take advantage of potential gains in the coming weeks. After breaking its previous all-time highs in 2024, the market has set a new, higher trading range. Expect increased volatility as the market reacts to the possibility of more interest rate cuts later this year. It’s crucial to keep an eye on the reverse relationship with riskier assets. If equity markets unexpectedly rally, it could negatively affect gold prices. Therefore, using options to manage risk or considering paired trades with major stock indices might be wise. Create your live VT Markets account and start trading now.

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