Gold prices in the Philippines dropped on Thursday, according to FXStreet data. The price per gram fell to 7,983.26 Philippine Pesos from PHP 8,002.44 the day before. The price for a tola decreased to PHP 93,117.34 from PHP 93,338.92 yesterday. These prices reflect international rates adjusted for the USD/PHP exchange rate.

Factors Affecting Gold Prices

Investors see gold as a valuable asset and an alternative currency. Central banks hold the most gold, adding 1,136 tonnes in 2022. Many factors impact gold prices. For instance, gold often rises during geopolitical uncertainties. Additionally, lower interest rates generally make gold more appealing. Gold prices typically move in the opposite direction of the US Dollar and US Treasuries. A weak Dollar usually pushes gold prices up, while a strong Dollar can lower them. The recent dip in gold prices seems like a temporary pause rather than a long-term shift. This slight downturn allows us to evaluate the larger forces at work before the next major move. For derivative traders, these small changes are less significant than the overall economic trends that will influence prices in the weeks ahead.

The Role of the US Dollar

The weakening US Dollar is a crucial factor to monitor since it typically moves opposite to gold prices. As of late 2025, the U.S. Dollar Index (DXY) has dropped nearly 5% this year due to market expectations that the Federal Reserve will start cutting interest rates in the first quarter of 2026. This mirrors trends seen before the 2019 rate cuts, where dollar weakness preceded a gold price rally. Inflation remains a concern, stubbornly hovering around 2.9% even after aggressive rate hikes that ended in 2024. This environment makes gold attractive, as it helps to protect against inflation and currency devaluation expected from future rate cuts. We are in a phase where gold stands to benefit from anticipated looser monetary policy. Moreover, strong demand from central banks supports gold prices. After record purchases in 2022 and 2023, the World Gold Council reports that central banks have added over 850 tonnes to their reserves in the first three quarters of 2025. This ongoing demand, particularly from emerging markets, signals confidence in gold and creates a solid price floor. This suggests that derivative traders should consider strategies that take advantage of expected upward movements and increased volatility. Buying call options or using bull call spreads could be smart ways to invest in gold while managing risk. These strategies would be profitable if upcoming economic data supports the market’s predictions of imminent rate cuts. There’s also a clear inverse relationship with risk assets. As stock markets like the S&P 500 struggle to reach new highs due to economic slowdown concerns, capital is flowing into safer assets. This shift from equities to gold may give the precious metal an extra boost as we move into the new year. Create your live VT Markets account and start trading now.

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