Gold prices in Pakistan fell on Monday, based on data compiled by FXStreet. Gold was priced at PKR 44,706.87 per gram, down from PKR 45,229.91 on Friday. Gold also dropped to PKR 521,452.10 per tola, from PKR 527,552.80 on Friday. Other listed prices were PKR 447,068.60 for 10 grams and PKR 1,390,544.00 per troy ounce.

Local Gold Price Snapshot

FXStreet converts global gold prices into Pakistani Rupees using the USD/PKR exchange rate and local units of measure. Prices are updated daily at the time of publication and are for reference only. Local market rates may vary slightly. Central banks hold the world’s largest gold reserves. According to the World Gold Council, they added 1,136 tonnes—worth about $70 billion—in 2022. This was the highest yearly total since records began. China, India, and Turkey were among the countries that increased their reserves. Gold often moves in the opposite direction to the US Dollar and US Treasuries. It can also move against risk assets. Prices can change with interest rates, geopolitical events, and recession concerns. Gold is priced in US dollars (XAU/USD). We are seeing small day-to-day moves, like the recent dip in Pakistan. These changes matter less to our overall plan. Our main focus is the weaker US Dollar, which has been trading in a tight range as markets wait for clearer signals on monetary policy. January 2026 inflation data came in slightly below expectations at 2.8%, adding more pressure on the dollar.

Strategy And Market Outlook

Expected interest rate cuts from the Federal Reserve and other major central banks over the next quarter remain the key driver for gold. Since gold does not pay interest, it tends to look more attractive when bond yields are expected to fall. We saw this pattern clearly during the rate-hike pauses in 2025. In the past, gold also rose strongly after policy turned: in the six months after the Fed began cutting rates in 2019, gold rallied by more than 15%. We are watching for a similar setup. We also believe ongoing central bank buying is helping to support prices. Central banks bought more than 800 tonnes in 2025, continuing the strong demand seen earlier in the decade. Steady purchases from large buyers such as China and India can help limit downside moves and reduce the risk of a long sell-off. Global stock markets also look stretched after a strong start to the year. Holding gold can help hedge a portfolio if equities pull back. Geopolitical risks remain in the background, and any major escalation could push investors toward safe-haven assets like gold. For that reason, we see this as a good time to consider long exposure as portfolio insurance. Overall, this backdrop suggests that dips may be buying opportunities. Options markets also show low implied volatility, which can make long-dated call options a useful way to gain upside exposure in the weeks ahead. This approach can position for a rally tied to changing monetary policy, while keeping risk defined. Create your live VT Markets account and start trading now.

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Gold prices in India fell on Monday, based on FXStreet-compiled data. Gold was priced at INR 14,508.73 per gram, down from INR 14,676.50 on Friday. Gold also dropped to INR 169,228.20 per tola from INR 171,183.80 per tola on Friday. Other listed prices were INR 145,088.70 for 10 grams and INR 451,272.40 per troy ounce. FXStreet calculates Indian gold prices by converting international prices using USD/INR and local units. Rates are updated daily at the time of publication and are for reference only, since local prices may differ. Central banks hold more gold than any other group. World Gold Council data says central banks added 1,136 tonnes of gold worth about $70 billion in 2022. That was the highest annual total on record. Gold often moves in the opposite direction of the US Dollar and US Treasury yields. It can also move against risk assets like stocks. Key drivers include geopolitics, recession fears, interest rates, and the strength of the US Dollar, since gold is priced in dollars (XAU/USD). Gold is pulling back, and this looks tied to recent US Dollar strength. The dollar index is up more than 1.5% over the past two weeks after a strong US jobs report for January 2026. This could be a tactical moment for derivatives traders as they plan their next move. Prices are also under pressure from changing interest rate expectations. Markets are now reducing bets on a US Federal Reserve rate cut in the first half of the year. Higher rates usually hurt gold because it pays no yield, which can make long futures positions riskier in the near term. Still, there is ongoing support from central banks. They kept buying heavily through 2025, adding more than 1,000 tonnes to global reserves. This demand can help put a floor under prices. Because of that, put options—or bets on a big drop—should be used with care. Risk-on sentiment is also weighing on safe-haven demand. Global stock markets did well in January, which reduces interest in assets like gold. This pattern makes sense, but a sudden geopolitical shock could flip it quickly. Traders may want to use derivatives to hedge against that kind of surprise. In India, the Rupee has been fairly steady against the dollar, so local prices have followed the global decline closely. With short-term pressure but long-term support, traders may look to options strategies that aim to benefit from volatility. These strategies can profit from a big move without needing to pick a direction in the weeks ahead.

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Japan’s industrial production rose 2.6% year on year in December. This was unchanged from the previous reading. The data shows that annual output growth stayed at 2.6% at the end of the year. This update did not include a month-on-month figure. With Japan’s industrial production for December 2025 stuck at 2.6% growth, the momentum seen earlier in 2025 may be weakening. The lack of improvement suggests Japanese equities could face a near-term ceiling. We should review any overly bullish positions on the Nikkei 225. This flat industrial result, along with the January 2026 inflation print of just 1.7%, supports our view that the Bank of Japan will keep its ultra-loose policy. The gap with other central banks, especially the US Federal Reserve, is likely to remain. That backdrop still points to a weaker yen, so long USD/JPY positions remain attractive. Given this outlook, selling out-of-the-money Nikkei 225 call options could be a sensible way to generate income if the market stays range-bound. We saw a similar plateau in mid-2024, which was followed by consolidation in stocks and a weaker currency. Current data looks more like a repeat of that setup than the start of a fresh breakout. Implied volatility may stay low as markets absorb steady but unexciting data. That could make it cheaper to buy longer-term protective puts on export-heavy industrial stocks. January 2026 export data already showed an unexpected slowdown in shipments to China and Europe, which makes hedging more relevant. In the coming weeks, we will look for confirmation in the Tankan business sentiment survey. For now, strategies that benefit from a sideways equity market and a weaker yen make sense. We should avoid adding to long equity positions until new growth catalysts appear.

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Japan’s industrial production fell 0.1% month over month in December. This matched expectations. The data shows a small drop in factory output from the prior month. No other figures were provided.

Market Impact On Volatility

Industrial production came in at -0.1% in December, exactly in line with the market forecast. With no surprise in the release, we should not expect a major move in implied volatility for currency or equity index options. That supports the idea of selling near-term volatility, including strategies such as iron condors on the Nikkei 225. This report also confirms the weak manufacturing trend seen through the second half of 2025. This ongoing stagnation makes it harder for the Bank of Japan to signal meaningful policy tightening. In other words, the data gives the BoJ another reason to stay cautious. With output essentially flat, the Bank of Japan has little reason to move away from its near-zero rate policy. With the US Federal Reserve’s policy rate still above 5%, the large rate gap continues to favor long USD/JPY positions. Futures or call options can be used to keep exposure to a weaker yen. A weaker yen, which this data supports, remains a key tailwind for Japanese exporters and the Nikkei 225. We saw this link clearly during the 2023 rally, and the drivers behind it remain in place. Buying Nikkei 225 futures or call spreads remains a core way to position for this dynamic.

External Demand And Export Outlook

We also need to consider external conditions. Demand from China has been uneven, which has weighed on Japanese export orders. This adds to the view that Japan is unlikely to break out of its low-growth pattern soon. That creates a relatively steady backdrop for existing currency and equity views. Create your live VT Markets account and start trading now.

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Japan’s capacity utilisation rose by 1.3% in December, compared with -5.3% the month before. That is a swing of 6.6 percentage points from the prior reading.

Capacity Utilisation Signals Industrial Rebound

Japan’s jump in capacity utilisation in December 2025 is a clear bullish signal. It reverses the prior month’s drop and suggests the industrial sector ended the year stronger than expected. We think this strength is likely to carry into the first quarter of 2026. This upside surprise could support Japanese equities in the weeks ahead. Higher factory use often leads to higher output and better earnings potential, which can make the Nikkei 225 more attractive. We should consider buying Nikkei futures or near-term call options to position for more upside. Other recent data supports this view. Japan’s industrial production in January 2026 rose by a seasonally adjusted 1.1%, beating consensus forecasts. The latest Tankan survey of large manufacturers also showed business confidence at its highest level in more than a year. Together, these signals point to a broad recovery. A stronger economy may also push the Bank of Japan to rethink its ultra-loose policy earlier than expected. That would likely support the Japanese yen. Derivatives traders could consider buying put options on USD/JPY, aiming to benefit if the yen strengthens against the dollar. We have seen similar moves before. In parts of 2023, speculation about policy normalisation helped the yen strengthen quickly. Today’s data looks stronger than it did then, which suggests that even small policy signals could cause a sharper move. That history supports the case for a stronger yen.

Positioning For Higher Yen Volatility

Uncertainty about the Bank of Japan’s next steps may raise implied volatility in FX markets. This can favour options strategies that benefit from bigger price swings, such as long strangles on USD/JPY. We should expect larger yen moves as markets adjust to this new set of data. Create your live VT Markets account and start trading now.

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EUR/JPY rose for a second straight session and traded near 181.60 in Asian hours on Monday. The move followed weakness in the Japanese yen after Japan’s Q4 2025 GDP figures came in below forecasts. Japan’s GDP grew 0.1% quarter-on-quarter in Q4, after a 0.7% fall in Q3. Markets had expected a 0.4% rise. On an annualised basis, the economy expanded 0.2%, versus a 1.6% forecast, after a 2.3% decline in Q3. Consumer spending rose 0.1% in Q4. Later today, attention turns to seasonally adjusted Eurozone Industrial Production data for December. The yen could still find support from expectations around Prime Minister Sanae Takaichi’s fiscal expansion plans, including higher spending and targeted tax cuts. Her election win also reduced political uncertainty and strengthened backing for these policies. The euro also gained after the European Central Bank showed limited concern about the currency’s recent rise. ECB President Christine Lagarde said the euro area inflation outlook is in a “good place” and cautioned against overreacting to short-term or volatile data. EUR/JPY is pushing higher toward 181.60, largely because Japan’s latest data was very weak. The economy grew just 0.2% on an annualised basis in the final quarter of 2025, well below the 1.6% that markets expected. While Japan narrowly avoided a technical recession, the report gives the Bank of Japan little reason to raise interest rates soon. A widening gap between central bank outlooks remains a key driver for this pair. After the GDP report, interest rate markets are pricing only a 15% chance of a Bank of Japan hike by mid-year, down from 40% just last month. In contrast, the European Central Bank appears comfortable with its stance, and traders do not expect a full rate cut until September 2026 at the earliest. This policy gap makes buying EUR/JPY call options an appealing strategy for the coming weeks. It allows participation in a potential uptrend while limiting risk to the premium paid. One approach is to consider strikes above the current price with expirations in late March or April, giving the trade time to play out. A similar setup played out from 2022 to 2024. During that period, the ECB raised rates while the Bank of Japan stayed on hold, and EUR/JPY rallied more than 30%. Today’s weak Japanese data creates a comparable backdrop for further gains. Key risks could still reverse the move. The biggest wildcard is Prime Minister Takaichi’s fiscal spending plans. If they start clearly lifting growth, the yen could strengthen quickly. Eurozone Industrial Production data due later today also matters, since a weaker-than-expected reading could temporarily slow the euro’s momentum.

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USD/CAD stayed in a tight range for a second day. It traded above 1.3600 in Asia on Monday. This follows last week’s bounce from near 1.3500. The US dollar inched higher, which supported the pair. Still, softer US consumer inflation data on Friday pushed up expectations for Federal Reserve rate cuts. Markets now expect at least two cuts by 2026, which limited further US dollar gains. The Canadian dollar got support from the Bank of Canada’s neutral stance, which helped cap USD/CAD. The BoC held rates for the second time in January, pointing to economic and geopolitical uncertainty. The BoC said uncertainty is making forecasts harder. Outcomes for 2026 could range from cuts to hikes to no change. Steady crude oil prices also supported the oil-linked Canadian dollar and kept the pair contained. Markets are watching Canadian consumer inflation data on Tuesday and FOMC minutes on Wednesday. Speeches from key FOMC members and the second round of US-Iran nuclear talks could move oil prices and USD/CAD. We see USD/CAD as firmly range-bound, pulled by competing forces. The rebound from 1.3500 last week has stalled below resistance near 1.3650. This shows limited conviction from both buyers and sellers. For the past three weeks, the pair has mostly traded inside this 150-pip band. The main factor limiting the US dollar is rising confidence that the Fed will cut rates this year. Friday’s US CPI report for January showed headline inflation at 2.9%. That was below expectations and marked the third straight monthly decline from 3.4% in late 2025. Market pricing now shows a 70%+ chance of at least two Fed cuts by the end of 2026, which caps the dollar’s upside. At the same time, the Canadian dollar is being supported by a more neutral BoC and persistent domestic inflation. Canada’s inflation remains high, with January at 3.2%, well above the BoC’s 2% target. This gap in inflation trends is a key reason the BoC is keeping rates steady, creating the current stalemate in USD/CAD. Oil prices, a major driver for the loonie, are also reinforcing the sideways move. WTI crude has stayed in a narrow $78–$82 range for the past month. Markets are waiting for more clarity from the second round of US-Iran nuclear talks. Stable oil removes an important source of volatility for USD/CAD. In this consolidating setup, we think selling volatility is the most sensible approach for derivatives traders in the next few weeks. Short-dated straddles or strangles, with strikes set outside the recent 1.3500 to 1.3650 range, may be a way to collect premium while the pair drifts. This approach benefits from sideways movement and time decay. Even so, key event risk is close. Tomorrow’s Canadian inflation release and Wednesday’s FOMC minutes could break the range. A hotter-than-expected inflation print in Canada or a hawkish tone in the Fed minutes could trigger a move. Any options-selling strategy should use tight risk controls.

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Silver (XAG/USD) dropped about 2% to around $75.00 in Asian trading on Monday, and was near $75.61 at the time of writing. January US CPI came in below forecasts, but it did not change expectations for near-term Federal Reserve rate cuts. Traders still expect the Fed to keep rates at 3.50%–3.75% in March and April, according to the CME FedWatch tool. US headline inflation slowed to 2.4% year on year from 2.7% in December. Monthly CPI rose 0.2%, down from 0.3% previously and below the 0.3% forecast.

Geopolitical Tensions And Safe Haven Demand

Focus also shifted to US–Iran tensions after Reuters reported the US military is preparing for possible operations lasting weeks if President Donald Trump orders an attack. These headlines can increase demand for safe-haven assets. On the charts, price is still below the falling 20-day EMA at $84.23, and RSI is at 43.47 (below 50). A daily close above $84.23 could ease downside pressure. If price stays below it, momentum remains weak. Silver prices can be influenced by geopolitics, interest rates, the US Dollar, industrial demand, and supply factors such as mining and recycling. Silver often moves with gold, and the gold/silver ratio is used to gauge relative value. At this time last year, silver was also struggling near $75 even as inflation cooled. Markets were focused on the Fed holding rates steady, which limited near-term upside. Iran-related risks were on investors’ radar, but they did not turn into the long-lasting conflict some feared.

How The Macro Backdrop Has Shifted

Since then, the Fed started a gradual easing cycle in the second half of 2025 as the labor market softened. Today, the benchmark rate is 2.75%–3.00%, which is generally more supportive for non-yielding assets like silver. Inflation has continued to ease, with the latest January 2026 CPI showing 2.1% YoY, supporting the case for additional rate cuts later this year. Industrial demand is still a major driver and is adding to the bullish case for silver in the weeks ahead. Early-2026 industry reports project global silver demand from photovoltaics will rise by more than 170 million ounces this year, while use in 5G-enabled devices is also growing. This strong industrial demand helps create a firmer price floor than traders focused on in early 2025. With this backdrop, traders may want to prepare for a move higher. Buying call options with strike prices near the prior resistance around $84 could be one way to target potential upside. This offers exposure to a rally supported by easier policy and stronger industrial demand. Volatility can be managed with bull call spreads. This means buying a call at a lower strike and selling a call at a higher strike. It caps the maximum profit, but it also reduces the upfront cost and lowers risk. It can fit a moderately bullish view as silver tries to break out of its recent range. The gold/silver ratio is also worth watching. It currently sits near 82, slightly above its long-term average. If it moves back toward the average, silver would likely outperform gold, which supports a long-silver view. For that reason, dips toward the low $80s may offer potential entry points for call strategies in the weeks ahead. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) edged up and traded near 97.00 in Asian hours on Monday, after small losses in the prior session. Trading was quiet because US markets were closed for Presidents’ Day, and Mainland China was closed for the week-long Lunar New Year holiday. The US Dollar stayed under pressure after weaker January Consumer Price Index (CPI) data boosted expectations for Federal Reserve rate cuts later this year. The CME FedWatch tool showed nearly a 90% chance the Fed would leave rates unchanged in March, up from 81% a week earlier.

Inflation Data And Rate Cut Expectations

Markets priced in about two 25-basis-point cuts by the end of the year. The first cut was expected in June, with about a 52% probability. US CPI rose 2.4% year-on-year in January, down from 2.7% in December and below the 2.5% forecast. Monthly inflation slowed to 0.2% from 0.3%, and also came in below the 0.3% expectation. US labor data suggested the job market was steady. This supported expectations of no change in March, followed by two cuts by year-end. Nonfarm Payrolls posted the biggest gain in more than a year, and the Unemployment Rate fell unexpectedly. Looking back to this time in 2025, the US Dollar Index was sitting near a low around 97.00. Markets strongly expected Fed rate cuts because inflation was cooling, running at 2.4% year-over-year. Those expectations were correct, and the Fed delivered two 25-basis-point cuts later that year. Today, the picture is very different, and that 2025 playbook may not apply in the weeks ahead. The dollar has been much stronger, with DXY recently near 104.50 as disinflation has stalled. The January 2026 CPI report showed inflation rising to 2.9%, up from 2.8% in December 2025.

Derivatives Strategy In A Higher For Longer Regime

Sticky inflation, along with a still-strong labor market that added 215,000 jobs last month, changes the outlook for Fed policy. The high odds of rate cuts seen in 2025 have faded. The current CME FedWatch tool now shows less than a 15% chance of a rate cut at the March 2026 meeting. For derivatives traders, this suggests shifting away from simple directional bets on a weaker dollar and toward strategies that can benefit from uncertainty and higher volatility. A strong economy alongside stubborn inflation creates many possible paths for the Fed. In this environment, buying options straddles on major pairs such as EUR/USD can make sense, because they can profit from a large move in either direction. With this level of uncertainty, implied volatility on dollar-related options may rise ahead of key inflation releases and Fed meetings. Traders may want to buy volatility while it is still relatively low, since a data surprise could trigger a sharp repricing. This points to long vega positions, which benefit when expected future price swings increase. The market focus has also shifted from *when* the Fed will cut to *whether* it will cut at all in the first half of the year. This makes options on SOFR futures useful for trading views on the timing of policy changes. Using these derivatives to position for a “higher for longer” outcome may be a sensible response to current economic conditions. Create your live VT Markets account and start trading now.

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NZD/USD traded near 0.6040 during Asian trading on Monday, after small gains in the previous session. The pair stayed firm even after New Zealand’s Business NZ Performance of Services Index slipped to 50.9 in January from 51.7. New Zealand inflation expectations moved higher, according to the Reserve Bank of New Zealand’s monetary conditions survey. Two-year expectations for Q1 2026 rose to 2.37% from 2.28%, while one-year expectations increased to 2.59% from 2.39%. The US Dollar weakened after January CPI data came in below expectations. Headline CPI rose 2.4% year on year, down from 2.7% and under the 2.5% forecast. Monthly CPI eased to 0.2% from 0.3%. Chicago Fed President Austan Goolsbee said rates are still likely to move lower, but any further easing will depend on services inflation. CME FedWatch showed close to a 90% chance of no rate change in March, up from 81% a week earlier. Markets are pricing in about two 25-basis-point cuts by year-end, with the first expected in June at roughly 52%. The NZD is influenced by New Zealand economic data, RBNZ policy, China-linked demand, and dairy prices. It also tends to gain in risk-on markets and fall in risk-off periods. We are focusing on the RBNZ inflation expectations survey from last month, which showed a clear rise in the two-year outlook to 2.37%. This more hawkish signal was supported by the Q4 2025 unemployment rate, released two weeks ago, which held steady at a tight 3.9%. Together, these numbers suggest the RBNZ has limited room to ease policy in the near term. On the US side, January inflation cooled to 2.4%, which has already shifted market sentiment. That view strengthened after weak US retail sales for January, released last week, pointed to a softer consumer. The probability of a first Fed rate cut in June is now above 60%, up from about 52% just a few weeks ago. Outside central bank policy, external factors are also helping the Kiwi. China’s latest manufacturing PMI for January moved back into expansion at 50.5, easing worries about demand from New Zealand’s largest trading partner. In addition, the Global Dairy Trade auction in early February posted another solid 2.5% price gain, supporting New Zealand’s export income. With this policy and data gap widening, we expect NZD/USD to have more upside in the weeks ahead. Traders may look at June-expiry call options to target a move higher, or use bull call spreads to lower the upfront cost. If NZD/USD breaks above the 0.6150 resistance level, it could open the way toward the Q4 highs seen in 2025.

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