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Gold Price Factors
Gold prices in Pakistan rose on Friday, with a gram costing 39,537.74 Pakistani Rupees (PKR), up from 39,220.21 PKR on Thursday. The price per tola increased to 461,159.90 PKR, compared to 457,456.90 PKR previously.
Gold is seen as a safe-haven asset due to ongoing economic risks and speculation of interest rate cuts. In recent developments, US-China trade tensions and the US government’s prolonged shutdown have increased demand. Additionally, geopolitical tensions in Eastern Ukraine have contributed to the rise.
Fed Chair Jerome Powell indicated a dovish stance on interest rates, with potential cuts anticipated in upcoming meetings. This has resulted in downward pressure on the US Dollar, further influencing gold’s appeal. FXStreet provides updated gold prices in Pakistan by adjusting international rates to local metrics, reflecting market conditions.
Gold remains a valued investment during uncertainty, often used as a hedge against inflation. Central banks are major holders, having added 1,136 tonnes in 2022, the largest annual purchase on record. The price of gold is influenced by geopolitical factors, interest rates, and currency fluctuations, often moving inversely to the US Dollar.
Looking back, we can see the foundation for gold’s strength was built on a combination of geopolitical risks and expectations of a dovish Federal Reserve. As of today, October 17, 2025, with gold trading near $2,450 an ounce, some of those same themes are still in play, though they have evolved. Traders should therefore be positioned for continued volatility in the precious metal.
Market Outlook for Gold
The Fed did indeed begin an easing cycle, as was anticipated, but recent data has complicated the outlook for the coming weeks. The latest September 2025 jobs report showed a cooling labor market with only 150,000 jobs added, yet core inflation remains sticky at 3.1%, making the Fed’s next move uncertain. This uncertainty supports gold, as it puts a cap on how high real interest rates can go.
Geopolitical risks have shifted but not disappeared, continuing to provide a floor for gold prices. While the major conflict in Ukraine de-escalated after the 2024 accords, we are now seeing heightened naval tensions in the South China Sea. This persistent need for a safe-haven asset is keeping strategic buyers interested in gold.
For derivative traders, this environment suggests that buying protection or speculating on further upside remains a viable strategy. We’ve noted a recent 15% increase in open interest for call options on December 2025 gold futures with a $2,500 strike price, signaling bullish sentiment in the market. Using strategies like bull call spreads could allow traders to capture potential gains while defining their risk.
The US Dollar remains a critical factor, and its recent behavior reflects the market’s indecision. The Dollar Index (DXY) has been trading in a tight range around 103, as weakness from a slowing economy is being offset by stubbornly high inflation. Any clear break in the dollar will likely trigger a significant move in gold, making currency derivatives a key area to watch for hedging gold positions.
