Insights 
VT 
Gold prices in Pakistan decreased on Friday, with the price per gram falling to 30,599.02 PKR from 30,754.37 PKR the previous day. The price per tola also dropped to 356,900.50 PKR from 358,713.00 PKR.
The US Federal Reserve recently kept interest rates steady, projecting two rate cuts by 2025. Despite this, only one rate cut is forecasted for each of 2026 and 2027 due to persistent inflation concerns.
Global Risk Sentiment
Global risk sentiment continues to be fragile due to trade uncertainties and geopolitical tensions, notable in the Middle East. Tensions between Iran and Israel persist, with potential US involvement raising concerns of a broader regional conflict.
The US Dollar saw a retreat after recent market activities, which might support commodity prices, including Gold. A supportive backdrop suggests stability for Gold prices, and some buying activity is anticipated at lower levels.
Gold is commonly used as a safe-haven asset during turbulent times, with central banks being major purchasers. Gold prices depend on various factors, including geopolitical stability, interest rates, and the strength of the US Dollar, which it is priced in.
While the drop in gold prices may appear modest on paper, it reflects a broader adjustment in sentiment following the Federal Reserve’s recent announcement. By holding interest rates steady and outlining a slower-than-expected timeline for cuts, the Fed signalled ongoing concern with underlying inflation—specifically that it remains more persistent than wanted. Powell’s comments offered little immediate encouragement for those expecting rapid monetary easing. The projection for just one cut in both 2026 and 2027 underscores that.
Geopolitical Risks and Market Sentiment
For those of us trading derivatives, particularly those tied to commodities like gold, this caution from the Fed should act as a prompt to reassess medium-term positioning. While nominal yields haven’t surged, they’re sticky at relatively elevated levels. That restricts upside momentum for bullion in the near term, despite weakening in the Dollar.
On the geopolitical side, the risks remain elevated with tensions still active in the Middle East. Tehran and Tel Aviv continue to make headlines, and with the possibility of American involvement hanging in the air, markets haven’t moved beyond a wait-and-see phase. This hesitancy often props up safe-haven demand, but reaction has been muted lately. What we’re seeing seems to be a form of selective hedging — the kind of positioning that builds quietly, rather than shows up in volume overnight.
Notably, the Dollar pulled back after the Fed’s release—perhaps a mild correction or a response to reassessed rate expectations. Either way, it has eased some pressure from Dollar-denominated assets, helping to offer a base for commodities. Gold in particular benefits when the greenback softens, as its international pricing becomes more attractive. A lighter Dollar generally leads to improved buying interest from non-US buyers.
Technically, support levels are being tested, and that delayed reaction provides an opening. While flows into physically-backed ETFs have slowed, market interest hasn’t evaporated. Longer-term buyers aren’t necessarily chasing recent highs but are often ready to re-enter at price levels considered attractive—especially if inflation proves sticky and geopolitical calm remains elusive.
In the near-term, if there’s fresh escalation in regional conflicts, we’d expect some rush into defensive assets. Traders should prepare for wider bid-ask spreads in such scenarios, particularly in thinner liquidity windows. Alternatively, a surprise from the next Fed presser or hints of hard data softening in the US economy could bolster the case for a more dovish outlook again, which in turn may revive bullish bets on gold.
Sharp adjustments are less likely unless a clear catalyst emerges. For now, attention should remain on where buying resumes. If price tests previous lower support zones and buying flows increase, it’s a reasonable place for short-term derivatives exposure focused on a bounce. Care should be taken with leverage, particularly with headline risk elevated and holiday-thinned volumes approaching in some jurisdictions. Any short exposure should be highly reactive and not left to drift if macro headlines break.
While bullion remains within a broad consolidation range, we see early signs of accumulation reappearing at dips. Keep an eye on open interest shifts and how implied volatility behaves during deeper intraday moves, as it often gives us a clearer picture than price alone. Also, monitor the commitment of traders data as it updates—resurfacing long positions by large speculators often precede directional moves.
