Gold prices in the Philippines dropped on Tuesday. The cost of gold per gram was PHP 6,213.78, down from PHP 6,225.32 on Monday. For gold priced per tola, the cost fell to PHP 72,475.28 from PHP 72,610.89. Additionally, prices included PHP 62,135.35 for 10 grams and PHP 193,270.40 per troy ounce.

Gold Price Adjustment

Gold prices in the Philippines are adjusted based on international rates and the USD/PHP exchange rate. These updates happen daily in line with market rates at the time of publication. Gold has historically functioned as a store of value and a medium of exchange. It acts as a safe-haven asset during tough economic times, providing protection against inflation and currency devaluation. Central banks are significant purchasers of gold, using it to enhance reserves and strengthen economic stability. In 2022, central banks bought 1,136 tonnes of gold worth around $70 billion. Gold prices often move opposite to the US Dollar and Treasury yields. When stock markets rise, gold prices may drop, while declines in those markets could support gold prices.

Influencing Factors

Gold prices are affected by geopolitical tensions, interest rates, and the value of the US Dollar. Lower interest rates can push gold prices up, while a strong Dollar typically keeps prices lower. The recent slight decrease in the Philippines is part of a larger global trend following the record highs above $2,400 per ounce in April. This minor pullback is not a sign of a major shift but reflects the market adjusting to significant gains amid mixed economic signals. Traders should be ready for ongoing pressure from a strong US Dollar and ongoing inflation data. The market has significantly lowered its expectations for interest rate cuts by the U.S. Federal Reserve in 2024, which historically strengthens the dollar and works against non-yielding assets like gold. A firm monetary policy from the U.S. central bank will likely limit substantial upward price movements in the short term. However, strong support for gold remains. Central banks added a net 290 tonnes to global reserves in the first quarter of 2024, showing a clear strategy to reduce dependence on the dollar. This institutional demand, along with ongoing geopolitical issues, creates a solid price foundation. For derivative traders, this mix of conditions suggests that volatility is the main factor to keep an eye on. Instead of making a simple directional bet, it may be wiser to prepare for significant price swings. The tension between strict central bank policies and strong physical demand could lead to sharp movements in the coming weeks. Historically, after a strong rally like the one seen earlier this year, gold tends to trade sideways before its next major move. A drift down towards the low $2,300s per ounce could lead to increased buying interest, reinforcing its status as a safe-haven asset. Monitoring the USD/PHP exchange rate closely is advisable, as local currency fluctuations will add more volatility to domestic prices. Create your live VT Markets account and start trading now.

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