Gold prices in the Philippines declined on Wednesday, with the price per gram dropping from 6,110.95 PHP to 6,023.33 PHP. The price per tola also saw a decrease from 71,276.92 PHP to 70,253.41 PHP.

Gold prices are calculated locally by converting international rates to the Philippine Peso, with daily updates based on market conditions. Historically, gold is a store of value and a medium of exchange and is considered a haven asset during uncertain times.

Central Bank Gold Reserves

Central banks hold large gold reserves to support their currencies during instability, with 1,136 tonnes purchased in 2022, valued at $70 billion. Emerging economies, including China, India, and Turkey, are rapidly increasing their gold reserves.

Gold prices are inversely related to the US Dollar and US Treasuries, which are major reserve assets. Gold price movements are influenced by geopolitical instability, recession fears, interest rates, and the strength of the US Dollar.

Geopolitical events and interest rates impact gold, with a weak Dollar likely pushing the price higher. Gold does not rely on specific issuers, making it a hedge against inflation and currency depreciation.

The recent drop in gold prices—from ₱6,110.95 to ₱6,023.33 per gram—is not unexpected, given how strongly the metal reacts to tightening financial conditions and shifting expectations around major reserve currencies. The price per tola, another common unit, followed suit, ticking down more than a thousand pesos, confirming a widespread easing in value. These changes are not just about the metal itself but rather what it represents in a global economy brimming with tension and reaction.

Spot rates for gold in the Philippines are updated in real time, mirroring changes in global demand and supply. When markets sense instability, the usual tendency is for interest to rise in safe-haven assets. But while gold is traditionally part of that category, its short-term pricing is hugely influenced by how the US Dollar performs against a basket of major currencies. As the Dollar builds strength, gold tends to weaken in local currencies, including the peso, because its appeal as an alternative starts to fade.

In the past few months, central banks, particularly in non-Western economies, have continued to add to their gold holdings to buffer against foreign exchange volatility. In 2022 alone, global central banks added over a thousand tonnes to their vaults. That momentum hasn’t slowed very much in 2023. Their rationale is clear: unlike fiat money, gold doesn’t carry counterparty risk. It’s liquidity and convertibility during market volatility make it advantageous when other reserves risk devaluation or dilution through monetary policy changes.

Market Influences On Gold Prices

From what we see in price behaviour, there is often sharp movement whenever investors shift out of interest-bearing US Treasury assets and into commodities. This is frequently triggered by doubt over future rate changes in Washington. Higher yields make bonds more attractive, so gold becomes less competitive. On the other hand, rate cuts or whispered suggestions of economic softness usually send gold higher. Discerning that shift early is likely to produce better entry or exit levels.

The way markets are now, gold seems caught between opposing forces. On one hand, central bank demand and long-term inflation fears linger in the background. On the other, a resilient Dollar and continuing rate pressures cap upside moves. For us, that means choppy trading in short timeframes and a need to adjust positions quickly. Directional bets may have to be re-evaluated more often than in quieter phases. Stronger activity around economic data days could cause unpredictable price jumps—both up and down. We expect volatility to stay elevated throughout the next few weeks.

Traders will need to stay alert on three angles in the short term—firstly, the pace of monetary tightening in the US, then capital flows coming from emerging economies, and finally, global risk sentiment around current conflicts or economic stumbles. Even without new tensions, shifts in inflation prints or labour market performance are likely to alter rate expectations fast enough to trigger commodity shifts. In almost every instance, gold responds rapidly to such changes.

We’re maintaining a view focused on relative strength indicators and Dollar momentum as more reliable intrawatch markers than historical correlations alone. If any fresh inflation figures signal stickiness, that could delay a return to rate easing and further dent near-term upside for gold. Conversely, lower-than-expected wage data or hints of job weakening could complicate policy stances, feeding into a bullish bid for metals. What’s important is knowing where to set limits, and avoiding exposure during uncertain Fed commentary windows.

There’s also a renewed interest in cross-asset plays—juxtaposing gold’s movement with real yields and volatility indices. While not every day offers a directional signal, divergence between commodities and bonds offers a decent proxy for risk tolerance. When real yields start dropping but gold doesn’t react, that often means markets aren’t entirely convinced of a rate cut. We’ve seen this several times already in Q1.

The coming weeks should see more of these moments—a quick burst of demand, followed by retracement. Letting fundamentals steer the view, but reacting with flexibility to technical dislocations, remains the better approach. For anyone timing entries, don’t ignore the local peso’s relative weakness, as it adds an extra layer that doesn’t always sync with international market moves. That mismatch, while sometimes fleeting, can be scaled tactically when timing aligns.

Create your live VT Markets account and start trading now.