The Bangko Sentral ng Pilipinas (BSP) is getting an unexpected windfall from the explosive surge in gold prices amid the coronavirus pandemic, according to stock broker Wilson Sy.
“Part of the $93 billion gross international reserves (GIR) held by the BSP is in gold. According to the latest data, the value of BSP’s gold reserves is about $8 billion. However, it still reflects June 2019 gold prices,” said Sy in his Philippine Star column.
“Revaluing these gold reserves to today’s prices should add roughly $3 billion to $4 billion to the country’s GIR,” he added.
With the yellow metal emerging as the safe haven to the stumbling US dollar, Sy expects gold’s rise to accelerate further after piercing the $2,000-mark for the first time.
“In technical analysis, new highs often lead to higher prices. Gold is now in uncharted territory and there are no resistance levels above. Note that gold has just broken out of a 10-year base. A measured move from the breakout level of 1,920 (computed by adding the base height to the breakout point) implies a target of 2,800,” Sy said.