Gold prices in Pakistan eased on Friday, FXStreet data showed. Gold was priced at PKR 35,795.39 per gram, down from PKR 35,968.94 on Thursday, while the per-tola rate slipped to PKR 417,517.20 from PKR 419,534.60. In other measures, 10 grams cost PKR 357,962.80 and a troy ounce was quoted at PKR 1,113,390.00. FXStreet derives local rates by converting international pricing via the USD/PKR exchange rate and adjusting for domestic units, with figures updated daily at publication time; the outlet said local market quotes may vary.
Gold continues to be framed as a store of value, a safe-haven asset and a hedge against inflation and currency depreciation, without reliance on any single issuer. Central banks remain the largest holders and, according to the World Gold Council, added 1,136 tonnes worth around $70 billion in 2022, the highest annual purchase on record; China, India and Turkey were cited among emerging markets increasing reserves. Gold is described as inversely correlated with the US Dollar and US Treasuries, as well as with risk assets, while price drivers include geopolitical risk, recession fears, interest rates and moves in XAU/USD.
Supply, Demand, and Policy Uncertainty
We see gold prices caught between strong underlying support and significant headwinds from US monetary policy. While central bank buying remains robust, the outlook for interest rates is creating uncertainty. This environment suggests that price action in the coming weeks will be driven by macroeconomic data releases.
The US Federal Reserve’s recent pause in its rate-cutting cycle, with the federal funds rate holding at 3.75%, has strengthened the dollar. With the Dollar Index (DXY) hovering around 106 and May 2026 inflation data coming in at a sticky 2.8%, the market is pricing in a more hawkish stance. This creates a challenging environment for gold, as higher rates increase the opportunity cost of holding the non-yielding asset.
However, a strong floor is being built under the market by persistent safe-haven demand and central bank accumulation. Following the record purchases seen in 2022, the World Gold Council reported that central banks, particularly in Asia, added over 250 tonnes in the first quarter of 2026. Geopolitical tensions in the South China Sea are also encouraging diversification away from the dollar.
Investor Strategies and Market Outlook
For derivatives traders, this suggests focusing on volatility and range-bound strategies over the next few weeks. The conflicting economic signals make a major breakout less likely, favoring strategies that can capitalize on price swings within a defined channel. We believe options strategies like selling covered calls on existing long positions could generate income while the market consolidates.
Historically, gold has performed well during periods of economic uncertainty, even with a strong dollar. The last time we saw sticky inflation with slowing growth in the late 1970s, gold eventually broke out after a period of consolidation. Therefore, we are closely watching upcoming US jobs and inflation reports for any signs of economic weakness that could force the Fed to alter its stance.
