Gold in the Saudi Financial Market: Comprehensive Analysis and Prospects

In the Saudi financial market, gold represents a strategic value among financial hedging tools and long-term investments. Gold is used as a store of value and a safe haven during periods of economic turmoil, making it a preferred asset for many investors. At the macroeconomic level, gold is part of the Saudi Central Bank's reserves, enhancing currency stability as the riyal is pegged to the US dollar.

Additionally, gold's presence is reflected in Saudi society's culture, whether through its use in jewelry manufacturing or as a common savings method among individuals and families. The Kingdom imports most of its raw and manufactured gold needs, while major local companies actively extract gold from national mines. Vision 2030 is driving the development of the mining sector to become a pillar of economic diversification, increasing the importance of gold as an asset and as a component in national industrial and investment activity.

Gold prices experienced significant fluctuations during 2024 and 2025. The price of an ounce globally rose to levels approaching $2,000 in the first half of 2024, driven by inflation fears and declining US bond yields, before gradually retreating as monetary policies stabilized in early 2025.

In the Saudi market, where the riyal is linked to the dollar, these movements directly reflected on local gold prices. The price of an ounce peaked at around 7,500 riyals, while it dropped to approximately 6,250 riyals at the beginning of 2025. Local demand remains influenced by seasonal factors (such as wedding seasons), in addition to global changes in the dollar price and interest rates. It is important to monitor metal trading platforms and economic indicators to understand immediate price movements and their impact on the local market.

There are various investment options in gold within the Kingdom of Saudi Arabia, differing based on investors' financial goals:
1. Purchasing gold bars and coins: Individuals can buy gold bars or coins from licensed banks or exchange companies, providing a direct means of holding the precious metal.
2. Investing in mining company stocks: Investing in stocks of companies such as "Ma'aden" (symbol: 1211) is the closest way to benefit from gold price movements at the corporate level.
3. Innovative banking products: Some banks have begun offering gold-denominated savings certificates, and new savings products have emerged that allow exposure to gold prices without the need to physically hold the metal.
4. Future monitoring of index funds and specialized funds: Although there are currently no direct gold trading funds in the market, regulatory bodies are working on developing new financial instruments that may include gold in the list of available products.

The Saudi Central Bank (SAMA) holds part of its reserves in the form of gold, with these reserves amounting to approximately 323 tons according to the latest official statistics as of 2022, with regular annual updates. The presence of gold in cash reserves supports the stability of the national currency and provides the Kingdom with an additional safety margin against global economic fluctuations.

Gold is also part of the policies of the Saudi sovereign fund, used to diversify assets and enhance cross-sector investments. Gold represents an additional safety element amid sudden changes in currency prices or geopolitical crises, explaining the Kingdom's continued development of the mining sector and increasing local gold production.

The mining and minerals sector is a cornerstone of Saudi Vision 2030, as the government seeks to increase the sector's contribution to GDP and diversify national income sources away from oil. The Saudi mining company "Ma'aden" plays a pivotal role in leading this transformation, being the largest gold producer in the Kingdom and managing several mines and expansion projects.

The Kingdom has launched several legislative and regulatory initiatives to attract foreign investments and improve the business environment in the mining sector, including updating regulations, offering tax incentives, and simplifying licensing procedures. Continuous exploration and recent discoveries are expected to increase gold production and open new opportunities for local and international investors in this vital sector.

The Saudi mining company (Ma'aden), listed on the Saudi financial market (Tadawul) under the symbol 1211, is the leading company in the mining and gold production sector in the Kingdom. Ma'aden has invested in the development of gold mines, including the Al-Amar mine, which saw new discoveries in 2024.

Ma'aden's financial indicators reflect its strong performance, with its stock price ranging between 66-70 riyals in early 2025, and a market capitalization close to 50 billion riyals. The company also showed revenue growth of over 10% during 2024, with net profits increasing by about 15% year-on-year. Ma'aden represents the top choice for investors looking to gain exposure to the gold and mining sector locally while benefiting from expansion and resource diversification programs.

Despite Ma'aden's leadership in the sector, competition includes several local and international players; basic materials companies like SABIC and companies specialized in iron and phosphate are part of the competitive landscape. Global mining companies (such as Barrick Gold and Newmont) have also entered into partnerships with the Saudi government to develop gold and rare minerals projects.

Additionally, Saudi banks and exchange companies provide direct investment products in gold such as bars and coins. The competition among these players enhances product quality and services, increasing options for investors in the local market while maintaining the transparency and regulations imposed by the Capital Market Authority.

The Saudi financial market has witnessed several significant regulatory developments during 2024-2025 concerning gold. The Capital Market Authority (CMA) has not yet issued specific regulations for gold contract trading, but the "Tadawul" platform has begun working on developing a commodities and futures market that may include gold in the near future.

Regulatory authorities have imposed strict requirements on the jewelry sector, including mandatory tax invoices and shop licensing. In contrast, banks have expanded their offerings of innovative products such as gold savings certificates. These developments contribute to enhancing transparency, protecting investor rights, and increasing the market's attractiveness to local and international investors.

Gold prices are influenced by several local and global economic factors, the most prominent of which are:
1. Inflation: Investors tend to turn to gold as a hedge against rising prices.
2. Interest rates: Lower interest rates enhance gold's attractiveness as it does not generate a fixed return.
3. Riyal exchange rate: The riyal's peg to the dollar means fluctuations in the dollar price affect gold locally.
4. Geopolitical conditions: Crises and conflicts increase demand for gold as a safe haven.
5. Central bank decisions: Buying or selling gold within reserves affects global demand.
6. Seasonal factors: Local demand for gold increases during wedding seasons and special occasions.

Understanding these factors helps investors assess risks and investment opportunities in a balanced manner.

Ma'aden is a model of companies whose financial performance is affected by global gold price movements. In early 2025, Ma'aden's stock price was around 68 riyals, with a market capitalization of approximately 50 billion Saudi riyals. The price-to-earnings ratio ranged from 15 to 20 times, reflecting the market's valuation of the company's performance and annual profits.

The company recorded revenue growth of over 10% during 2024, with net profits rising by about 15%. The cash dividend yield ranged between 4-6% annually, making it a primary choice for investors looking to gain exposure to the mining sector. Ma'aden's performance reflects the strength of the Saudi gold sector and the role of national companies in achieving financial sustainability.

The years 2024 and 2025 witnessed significant developments in the Saudi gold sector, including:
- New discoveries of gold and copper at the Al-Amar mine in the Riyadh region, enhancing national reserves and increasing future growth opportunities.
- Fluctuations in global gold prices, reaching $2,070 per ounce in March 2024 before gradually declining with the stabilization of global monetary policies.
- Expansion of phosphate and fertilizer production lines at Ma'aden, adding new financial flows to the company.
- Signing cooperation agreements between the Saudi government and global mining companies to support exploration and investment in precious metals.
- Ongoing regulatory efforts to develop the commodities and futures market, which may pave the way for the listing of financial products linked to gold in the near future.

Gold represents an investment tool distinct from stocks, bonds, and real estate in terms of risks and returns. Gold does not generate direct financial returns (interest or dividends) but provides protection against inflation and market fluctuations.

Gold's performance is typically inversely related to the stock market during times of crisis, as investors turn to it as a safe haven. In contrast, investing in stocks or real estate offers regular returns but carries higher risks due to market volatility or economic conditions. For this reason, it is generally advised to diversify the investment portfolio to include gold alongside other instruments, achieving a balance between return and risk according to the investor's goals.

The gold sector in Saudi Arabia boasts several growth opportunities, including continued government support for the mining sector, new resource discoveries, and increasing local and global demand. Financial market developments also contribute to expanding investment options and facilitating access to gold-related products.

However, challenges include global price fluctuations, competition with international companies, and changing regulatory frameworks. The sustainability of the sector relies on continued exploration and achieving a balance between imports and local production. The importance of keeping pace with technological and regulatory developments to enhance gold's position as a strategic asset for Saudi investors is highlighted.

Forecasts indicate continued growth in the Saudi gold sector under Vision 2030, supported by economic diversification programs and investment in the sector's infrastructure. With increased discoveries and encouragement of foreign investments, local gold production is expected to rise, enhancing its contribution to GDP.

The Saudi financial market is also expected to see developments in investment tools related to gold, such as index funds and futures contracts, providing broader opportunities for individual and institutional investors. Gold remains a fundamental element in financial policies, with the importance of balancing risks and consulting specialized experts before making any investment decisions.