Gold prices in Pakistan increased on Tuesday, with the price per gram rising to PKR 29,312.23 from PKR 29,224.33 on Monday. The price per tola also rose, reaching PKR 341,898.90 compared to the previous day’s PKR 340,866.80.

US Treasury bond yields have been climbing, with the 10-year Treasury note yield reaching 4.453%. Real yields, according to US Treasury Inflation-Protected Securities, remained stable at 2.163%.

Central Bank Gold Purchases

Forecasts suggest US CPI for April will stay at 2.4% year-on-year, and core CPI is expected to maintain at 2.8% year-on-year. In April, the People’s Bank of China added 2 tonnes of Gold to its reserves, marking the sixth consecutive month of increase, while the National Bank of Poland and the Czech National Bank also grew their reserves.

Market expectations include the Fed’s rate cut of 25 basis points at the July meeting, with another potential decrease later in the year. Gold prices in Pakistan are calculated using international prices adjusted to local currency and units, with daily updates reflecting market rates.

Gold gained slightly in domestic pricing, moving to PKR 29,312.23 per gram and PKR 341,898.90 per tola. That moderate rise reflects strength in global demand, fuelled in part by central banks accumulating reserves. China, for instance, made another purchase in April, its sixth month in a row, adding two tonnes to its holdings. Poland and the Czech Republic followed a similar course. These actions typically don’t trigger immediate spikes, but they underpin a steady interest in gold as a long-term hedge, especially as inflation remains a talking point.

On the yields front, the 10-year US Treasury continues to grind higher, now sitting above 4.45%. What’s more telling, though, is that real yields have held near 2.16%, suggesting that inflation expectations are relatively under control. Regardless, this persistence in tight credit conditions helps explain why interest in non-yielding assets like gold hasn’t surged. Normally, when real yields stay elevated, we’d expect gold demand to soften, since it doesn’t produce income. But with rates potentially peaking and downside moves expected by mid-year, the current price resilience makes more sense.

Inflation Data and Market Positioning

Inflation data will offer fuel for decision-making. The US Consumer Price Index for April is unlikely to surprise — consensus puts headline CPI at 2.4% year-on-year, with core inflation steady at 2.8%. If these numbers print as forecasted, they affirm a deceleration without disinflation. That’s the fine balance the Federal Reserve seems content with for now. Naturally, if either number overshoots, bond yields could jump higher, pressing gold downward. But if inflation softens even slightly or labour data softens further, a July rate cut becomes much harder to ignore.

We’re also watching central bank activity for shifts. Sustained gold buying by monetary authorities suggests a preference for diversification — particularly away from reserve currencies historically seen as safe. Geopolitical risks linger in the background, and regional instability may keep safe-haven assets attractive. That theme isn’t going away soon.

For those exposed to leveraged products or volatility-linked instruments, it’s worth noting that gold’s stability — despite rising yields — is a structural signal. The market is already pricing in upcoming rate changes. If you’re reacting solely to current yield moves without considering the broader monetary stance or institutional demand for metals, you could be misaligned.

From our side, priority should shift towards front-loading positioning ahead of CPI and FOMC minutes. Premiums in volatility pricing may remain subdued until there’s a catalyst, so this remains a window for recalibrating risk. The question isn’t whether rates will be cut — it’s when. And whether the market prices these shifts gradually or in lurches. Either way, we’re likely to see skewed risk exposure in the event inflation data underwhelms or geopolitical conditions deteriorate.

Traders should beware anchoring expectations too heavily on treasury yields alone — central bank demand has proven sticky, and that creates a stabiliser below spot trends. Pricing in this conviction may be more important than momentum signals over the next few cycles.

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