Gold: Comprehensive Analysis of the Saudi Gold Market 2025

Gold is a precious metal with a long history in human civilization, used as a tool for storing value and hedging against inflation and financial crises. Gold is considered a measure of wealth and rarely loses its status as a safe haven during economic or geopolitical fluctuations. In macroeconomics, gold is used to back currencies and debt, and central banks around the world, including Saudi Arabia, maintain strategic gold reserves to support monetary stability. This is reflected in gold's ability to maintain purchasing power over time, making it a fundamental pillar in building diversified investment portfolios. The inclusion of gold in the basic materials sector in Saudi Arabia makes it part of a broader economic system, highlighting its role in supporting development through the mining sector and the advancement of related manufacturing industries such as jewelry and industrial technologies.

Gold prices experienced noticeable fluctuations during 2024 and 2025, with global prices per ounce rising from levels of $1,850–$2,100 in 2024 to around $2,300–$2,500 per ounce by mid-2025. In the Saudi market, this increase reflected on the price of 24-carat gold, reaching approximately 260 riyals compared to about 220-230 riyals at the beginning of 2024, representing an annual increase of nearly 15%. This rise is attributed to factors such as escalating global inflationary pressures, increased investment and central demand, growing geopolitical tensions, and changes in U.S. and international interest rates. Locally, the exchange rate of the riyal against the dollar plays a role in determining the final price of gold in the Saudi market, as the price per ounce is quoted in dollars and converted to riyals based on the prevailing exchange rate.

Saudi Arabia is among the countries that hold substantial gold reserves within their foreign assets. According to 2024 data, the Kingdom's reserves reached approximately 323 tons of gold, according to reports from the World Gold Council and the International Monetary Fund. This figure represents one of the largest reserves in the Middle East and reflects the importance of gold as a strategic tool within Saudi monetary policy. These reserves are managed by the central bank and are used as a backing to enhance confidence in the local currency and support financial stability, without direct intervention in the daily gold trading market. Saudi Arabia's advanced position in reserves provides it with greater flexibility in facing economic shocks and enhances its ability to manage financial crises.

There are multiple options for investors wishing to gain exposure to gold in the Saudi market, including traditional methods such as purchasing gold bars and coins from jewelry stores or banks. Some Saudi banks have launched gold-based savings and investment products, such as gold banking accounts that allow for gradual purchases or electronic ownership of gold. In global markets, there are exchange-traded funds (ETFs) that track the spot price of gold, although their trading is limited locally and requires licensed international brokerage. In the local stock market, there is no stock or fund directly linked to gold, but investors can invest in mining companies such as Ma'aden, which includes gold extraction in its activities. It is worth noting that each method has its advantages and challenges in terms of liquidity, costs, and risk profiles, and it is advisable to review the regulatory details of each method before making any decision.

There are no listed companies on the Tadawul that directly carry the name 'Gold', but the Saudi Arabian Mining Company (Ma'aden 1211) is the main gateway for investment in the precious metals sector, including gold. Ma'aden is the largest mining company in the Kingdom, operating in gold, phosphate, and aluminum extraction, with continuous expansion in its mining projects. Ma'aden's stock trades between 60–70 riyals by the end of 2025, with a market capitalization of around 75–85 billion riyals. Its financial results reflect continuous growth driven by rising global metal prices and increased local production. Ma'aden is the primary option for those wishing to gain exposure to the gold sector through the Saudi stock market, keeping in mind that its operations include other metals alongside gold.

The financial reports for the fourth quarter of 2024 showed growth in revenues and profits for Ma'aden, with revenues increasing by 15–20%, and net profit rising by about 10–15% compared to the same period last year. The company's price-to-earnings (P/E) ratio was 20–25, while the dividend yield ranged between 2–3% annually. Ma'aden benefits from rising gold and other metal prices and continues to develop new projects in gold as part of its investment plans. The company's strategic growth includes entering into partnerships and alliances with global companies and expanding its operations in new areas within the Kingdom. Although gold represents a part of Ma'aden's business portfolio, the company's performance is also influenced by phosphate and aluminum prices, making it relatively balanced against fluctuations in the gold market alone.

Gold is classified within the 'precious metals' sector under the mining and basic materials sector in the Saudi Tadawul. The sector has witnessed significant expansion in 2024–2025, driven by government support under Vision 2030 to develop non-oil industries. New regulations set by the Capital Market Authority include organizing the trading of futures contracts and gold-related murabaha instruments, providing companies and investors with more diverse financial tools for risk management and hedging. Mining companies benefit from government incentives and investment facilitation, while facing challenges related to global price volatility, regulatory changes, and environmental compliance costs. The stability of policies and the evolution of the legislative environment are crucial factors in supporting sector growth.

Gold prices in the Saudi market are influenced by a range of global and local factors, most notably: U.S. interest rates (where a decrease stimulates demand for gold), inflation rates, geopolitical tensions (such as crises in Ukraine and the Middle East), and monetary policies of major central banks. The exchange rate of the riyal against the dollar also plays a critical role in determining the local price of gold, as gold is priced globally in dollars. Local demand for jewelry and investment, along with changes in local regulations, also affect product liquidity and ownership costs. All these factors interact to determine price dynamics in the Saudi market and investor trends.

Gold competes with other precious metals such as silver, platinum, and palladium in attracting capital seeking inflation hedges or portfolio diversification. At the same time, it competes with foreign currencies (especially the dollar and euro), which are sometimes viewed as safe havens. Strategic commodities like oil are also considered competitors to gold in the Saudi market, as some investors prefer exposure to commodities directly related to the national economy. Additionally, cryptocurrencies, particularly Bitcoin, have become an unconventional competitor to gold as they are viewed as an alternative hedging tool. In the mining sector, global companies like Barrick Gold and Newmont compete with Saudi mining companies in production and investments, despite not being locally listed.

In recent years, new banking products such as gold savings accounts have been launched, along with developments in regulatory frameworks for the financial market, including the commencement of trading futures contracts on gold within the derivatives platform. The Saudi Ministry of Industry and Mineral Resources continues to implement new exploration and extraction projects as part of the strategy to develop the national mining sector. Major companies have entered into strategic alliances to enhance exploration and production operations. At the service level, transparency and price disclosure have been enhanced through official financial platforms such as Tadawul and Argaam. These developments aim to empower investors and improve the competitive environment of the sector.

Gold has long been associated in Saudi culture with concepts of wealth and financial security, traditionally used in social and economic occasions as gifts or a means of preserving capital. With the evolution of financial instruments and increased investment awareness, gold is now viewed as part of a balanced investment portfolio, especially in times of uncertainty. Financial institutions advise diversifying investments and not relying on a single asset, with gold representing an important element in this diversification due to its nature not being directly tied to stock or bond fluctuations. The integration of gold into long-term financial plans continues as a tool for hedging against inflation and protecting purchasing power.

Despite its status as a safe haven, gold is not without risks. The most significant of these is price volatility, which can lead to capital losses, especially in the short term, in addition to the absence of periodic returns (unlike stocks or bonds that provide dividends or interest). Moreover, buying and selling costs (commissions and manufacturing fees) can affect net returns. Other challenges include changing regulatory policies or taxes, and the difficulty of quickly liquidating physical gold compared to electronic assets. Specialists recommend assessing the size of investment in gold in relation to personal financial goals and risk tolerance.

Investors should rely on official and trustworthy sources to track gold prices and movements, such as the Saudi Tadawul website, Argaam, the World Gold Council, and reports from the International Monetary Fund. Local banks and trading platforms also provide real-time updates on gold prices and the stocks of local mining companies. It is advisable to avoid untrustworthy or unlicensed sources that may provide misleading or inaccurate information. It is also important to follow quarterly reports from listed companies like Ma'aden and government reports on gold reserves and new mining projects.