Gold prices in the Philippines went up on Tuesday. One gram is now priced at 8,462.27 Philippine Pesos (PHP), up from 8,381.00 PHP on Monday. The price for one tola increased to 98,702.39 PHP from 97,754.30 PHP the day before. FXStreet sets these prices by converting international rates into local currency, updating them daily according to market conditions. These numbers are just for reference, and local rates may vary slightly.

Role of Gold

Gold is a valuable asset and is often traded during uncertain times. People buy it as a safe investment and to protect against inflation and currency falls. Central banks hold the most gold, purchasing 1,136 tonnes valued at $70 billion in 2022. This was the highest annual purchase to date, mainly from emerging markets like China, India, and Turkey. Gold prices usually rise when the US Dollar weakens. A drop in the Dollar often boosts gold prices, helping investors diversify their assets during tough times. Geopolitical issues and changes in interest rates also affect gold prices because of its safe-haven status and its link to the Dollar. The recent increase in gold prices in the Philippines shows gold’s role as a shield against currency fluctuations. As derivative traders, we view this trend as part of a larger pattern, tied to gold’s inverse relationship with the US Dollar. Looking ahead to late 2025, the market expects changes from major central banks, especially the US Federal Reserve. After sharp interest rate hikes in 2023, current data shows economic growth is slowing, with many predicting possible rate cuts by mid-2026. This has pressured the US Dollar, with the Dollar Index (DXY) now around 98.5, significantly lower than in previous years.

Central Bank Purchases

This environment makes gold even more appealing. Central banks continue to buy gold, maintaining a record trend from 2022. The World Gold Council reports that net purchases by central banks stayed above 800 tonnes in both 2023 and 2024. This ongoing demand from official sources helps stabilize prices and indicates a global move toward diversifying reserves. Additionally, inflation in many Western countries remains high, staying above the 2% target at around 3.2% in recent reports. In this context, gold—offering no yield—becomes more attractive compared to government bonds that may provide low or negative returns. This scenario strengthens gold’s position as a safe-haven asset amidst ongoing geopolitical tensions. For traders in the upcoming weeks, a bullish outlook on gold derivatives seems reasonable. We should consider taking long positions through call options or bull call spreads to benefit from anticipated price increases as we approach the new year. A key level to watch is the potential re-test of the all-time highs from 2024. The rise in local Philippine gold prices is also supported by currency factors, as the Philippine Peso has recently been trading above 59 to the US Dollar. This weakness in the local currency boosts the value of PHP-denominated gold holdings. Therefore, traders should consider both the international gold price movements and the USD/PHP exchange rate in their strategies. Create your live VT Markets account and start trading now.

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