MB decides to shift to active trading due to higher world gold prices

September 5, 2020

The Monetary Board has decided to shift from passive to active trading because gold prices worldwide has risen, said Bangko Sentral ng Pilipinas Gov. Benjamin Diokno in his Twitter account on Saturday.

Gold prices were in the neighborhood of $1,400 fine troy ounce but now it's around $2,000 fine troy ounce, said Diokno.

The spike in gold prices, according to news reports, is due to the uncertainty caused by the impact of the coronavirus disease the world economy.

A second reason behind  the high gold prices is a new law making Bangko Sentral ng Pilipinas gold purchases from small miners more attractive, said Diokno.

Third, gross international reserves has grown to $100 billion, the highest ever in Philippine history, said Diokno.

''The MB sees the need to better manage the country's international reserves,'' said Diokno.

''Studies show that the optimal portfolio mix of gold to gross international reserves should be 9.8 percent. A World Bank survey showed  that the average allocation of gold relative to reserves should be around 9.55 percent,'' said Diokno. DMS