Gold prices in Pakistan decreased on Friday, with the price per gram dropping to 27,957.97 PKR from 28,072.70 PKR the previous day. The price for a tola of gold fell to 326,096.90 PKR, marking a reduction from 327,434.40 PKR.
The latest data reflects that gold prices for different units are 279,580.20 PKR for 10 grams and 869,590.90 PKR for a troy ounce. Factors such as recent US economic developments and adjustments in the Federal Reserve’s rate policies have influenced market dynamics.
US Economic Influences
Recent reports show that the US services sector’s activity declined, with ISM Services PMI dropping to 50.8. Additionally, new unemployment insurance applications fell to 219,000, down from 225,000.
Central banks globally are increasing gold reserves, with a total of 1,136 tonnes purchased in 2022, valued at around $70 billion. Emerging economies like China, India, and Turkey are notably expanding their gold holdings.
Gold prices are generally affected by geopolitical instability and changes in the US Dollar’s strength. A stronger dollar tends to suppress gold prices, while a weaker dollar usually results in a price increase for the precious metal.
Despite a slight pullback in local markets, what we’re observing in the broader macroeconomic picture continues to lend weight to long-term support for gold markets. The decline in prices—27,957.97 PKR per gram and 326,096.90 PKR per tola—represents a natural reaction to a stronger dollar and improved short-term sentiment in US economic indicators, but it doesn’t necessarily suggest a lasting trend reversal.
Powell’s team hasn’t delivered any major surprises recently, yet markets remain sensitive to even subtle signals from their side. The fall in jobless claims to 219,000, a modest drop from 225,000, suggests the labour market remains resilient, albeit with some signs of cooling. At the same time, ISM Services PMI dipping to 50.8 indicates service sector inertia, toeing the line of contraction territory. These mixed figures leave market participants on edge, balancing expectations around future rate decisions and potential course shifts.
Central Bank Gold Reserves
Given that central banks continue to stockpile gold—1,136 tonnes in total last year—the longer-term demand picture stays relatively well-supported. This movement by institutions in China, India, and Turkey generally reflects a preference to reduce reliance on the dollar and hedge against economic instability. For us, this highlights underlying strength in physical demand, separate from speculative flows.
While spot prices have softened slightly in rupee terms, it’s essential to recognise what’s happening with the US Dollar. Recent strength in the greenback has made gold comparatively more expensive for holders of other currencies. This tends to discourage some buying and triggers a pullback—what we’ve just seen reflected locally.
From a derivatives perspective, implied volatility remains relatively muted, suggesting that traders expect narrow ranges in the short term. That said, the underlying macro signals—oscillating between inflation fears, geopolitics, and rate uncertainty—are by no means resolved. Each of these elements can rapidly change sentiment, and with positioning still moderately long, the risk of short squeezes or sharp corrections hasn’t vanished.
In the coming sessions, we might expect futures markets to dance around resistance levels unless triggered by a decisive shift in rate outlooks or unexpected data surprises. One could take cues from bond yields and currency movements, keeping an eye particularly on the 10-year yield. If yields begin stretching upwards again, downside pressure on gold may continue. But if economic data begins to show more consistent weakening, markets may start pricing in a more dovish stance from the Fed, which could reverse the current direction.
We’re also watching for cues out of Asia—particularly import behaviour in India and China. Seasonal demand and festive buying patterns often introduce price swings that aren’t strictly tied to macro fundamentals, but they still affect short-term sentiment and premium structures across spot and futures.
Ultimately, preparation involves clarity about positioning, understanding underlying beta exposure to both currency and rate expectations, and being nimble enough to pivot when data moves. Prices may look soft now, but the supporting thesis for gold hasn’t disappeared. What we’ve seen is a reaction—not a revaluation.
