Global Gold Prices: Drivers, Trends, and Their Impact on the Saudi Market

Global gold prices are a key benchmark for measuring financial stability in international markets. The price of gold is usually quoted in US dollars per ounce and is subject to daily fluctuations based on trading on global exchanges, such as the New York Mercantile Exchange (COMEX) and the London Bullion Market. For centuries, gold has been used as a monetary reserve by countries and remains a part of central bank reserves worldwide. The importance of global gold prices extends beyond individual investment; they affect currency values, play a role in monetary policy decisions, and are considered a safe haven during times of economic and political crises. In both emerging and developed markets, gold is influenced by interest rate movements, inflation, geopolitical crises, and stock market volatility. In Saudi Arabia, global gold prices are relied upon as a primary reference for determining local gold prices, making it essential for traders and investors to monitor these prices.

Several factors influence global gold prices, which can be categorized into economic, political, and technical factors. Among the most significant economic factors are central bank policies, especially those of the US Federal Reserve, as decisions to raise or lower interest rates directly affect gold's attractiveness. Inflation is also a crucial factor; as inflation rates rise, demand for gold as a means of preserving value increases. Additionally, movements in the US dollar play a pivotal role, as a declining dollar often leads to rising gold prices. Political factors include geopolitical crises such as armed conflicts or tensions between major nations, which drive investors to seek safe havens. On the technical side, supply and demand mechanisms, central bank reserves, and industrial buying (particularly in electronics and medical sectors) impact prices. All these factors together create a continuous dynamic in the global gold market.

Global gold prices experienced wide fluctuations in 2024 and 2025 due to changes in global monetary policies and geopolitical events. At the beginning of 2024, the price per ounce ranged between $1900 and $2000, supported by fears of inflation and recession. With increasing purchases by central banks, the price exceeded $2100 in some sessions. Later, prices corrected to $1800–$1900 as monetary policies stabilized. In 2025, gold began to decline slightly due to reduced inflation concerns, then rose again with renewed geopolitical tensions. According to international reports, the average price is expected to remain around $2000 per ounce in 2025, with continued short-term fluctuations. This dynamic underscores the importance of closely monitoring economic and political events that influence gold prices.

The Saudi market is directly affected by movements in global gold prices, as local pricing relies on international prices converted to Saudi riyals. In the first half of 2024, the price of gold per gram (21K) was approximately 220 Saudi riyals, rising to over 260 riyals during peak periods, before stabilizing at 240 riyals at the beginning of 2025. These fluctuations reflect the impact of the exchange rate between the dollar and the riyal, in addition to changes in oil prices and local liquidity. Rising gold prices also affect local demand, as investors and individuals turn to gold as a hedge against inflation or as a means of preserving wealth. On the business side, these prices influence the activity of jewelry and goldsmith shops, as well as investment decisions for individuals and companies. Gold remains one of the important investment tools in the Saudi market, especially given the riyal's peg to the dollar and financial stability policies.

Gold is considered a safe haven for investors during times of economic and political uncertainty. Historically, gold prices have risen during major financial crises, such as the 2008 global financial crisis and the COVID-19 pandemic in 2020, as investors turned to gold to protect their wealth from market volatility and currency depreciation. Gold has unique characteristics, including limited supply, global acceptance, and relative independence from the performance of individual companies or economies. Furthermore, gold is not directly linked to the performance of stocks or bonds, making it an ideal tool for diversifying investment portfolios. In Saudi Arabia, demand for gold increases during periods of rising inflation or currency weakness, as it is viewed as an effective means of preserving purchasing power. For this reason, monitoring global gold prices remains vital for investors looking to mitigate risks and enhance financial stability.

Global gold prices are typically quoted in US dollars, creating an inverse relationship between gold and the dollar. When the dollar weakens due to expansive monetary policies or rising US public debt, gold becomes more attractive to investors, especially in countries that deal in other currencies. Additionally, movements in the euro, yen, and pound sterling affect gold prices, as increases in gold can offset weaknesses in these currencies. In Saudi Arabia, where the riyal is pegged to the dollar, any significant change in the exchange rate between the dollar and other currencies reflects on the local gold price. Hence, monitoring global central bank policies and currency exchange rates is an essential part of analyzing gold price trends.

The gold sector in Saudi Arabia is one of the largest in the region, with jewelry and goldsmith shops spread across all major cities. Saudis consume gold for adornment and investment purposes, especially during social occasions such as weddings. Additionally, gold has become part of the investment portfolios of many individuals and institutions, whether through purchasing bullion or investing in gold-linked financial products. The local market closely monitors global price developments, as buying and selling activities are influenced by international price fluctuations. The Saudi Standards, Metrology and Quality Organization plays a role in regulating the sector to ensure transparency and product quality. In recent years, the gold sector has witnessed significant growth with increasing investment awareness among the Saudi community.

Hail Cement Company (symbol 3001 on Tadawul) is a mid-sized player in the Saudi cement sector. The stock price was approximately 11.60 Saudi riyals in the latest trading session, showing relative stability during that period. The company's market capitalization is several billion riyals, considering the number of outstanding shares. The price-to-earnings (P/E) ratio ranges between 10 and 20, which is a moderate rate for the sector. The annual dividend yield is around 5-6% according to the latest data, making the company's stock an attractive option for some investors seeking regular income. The company follows a semi-annual or annual dividend distribution policy and continues its efforts to improve operational efficiency and expand market share. Details of Hail Cement's stock can be tracked via the stock page on the SIGMIX platform or through Tadawul.

The cement sector occupies a strategic position in the Saudi economy, supporting infrastructure projects and Vision 2030 initiatives. The sector includes more than 10 major companies, including Arabian Cement, Qassim Cement, Northern Region Cement, and Najran Cement. These companies compete for local market share and exports, facing challenges in supply and demand and production costs. Hail Cement stands out in northern Saudi Arabia, covering wide areas with its products. Competition depends on product quality, operational efficiency, and companies' responsiveness to major national project requirements. Rising energy prices and input costs, along with currency exchange rate fluctuations, impact the profitability of cement companies.

The effects of global gold prices extend to several sectors of the Saudi economy. In the retail sector, prices affect jewelry and bullion sales, as well as the liquidity available to individuals. In the banking sector, changes in gold prices influence banks' policies regarding reserves and asset diversification. In the investment sector, rising gold prices often coincide with a shift in liquidity from stocks or real estate to gold, especially during times of economic uncertainty. Even the cement sector is indirectly affected, as movements in commodity prices like gold reflect inflation trends and financial policies, thus impacting production costs and demand rates for building materials.

In 2024, the gold market continued to experience fluctuations, with price peaks above $2100 per ounce, followed by a decline as international monetary policies stabilized. Increased demand from central banks, especially in China and India, bolstered price levels. Regionally, the price of gold per gram in Saudi Arabia rose to over 260 riyals at certain times. Conversely, Hail Cement Company recorded stable performance with efforts to enhance operational efficiency and increase supply for government projects in the north. Financial reports showed slight growth in profits as the company continued to distribute cash dividends to shareholders. The company is exploring expanding production capacity to keep pace with national projects, considering the impact of energy prices on profit margins.

Global gold prices can be monitored through specialized financial platforms such as Investing.com, Bloomberg, and Kitco, which provide real-time updates and analytical reports. International metal exchanges also offer immediate data on prices and futures contracts. In Saudi Arabia, jewelry shops display updated local prices in Saudi riyals, which depend on the global price plus manufacturing costs and taxes. The Tadawul platform provides official data on listed companies and gold-related indices. It is advisable to follow reports from central banks and research institutions for in-depth analyses of market trends.

Global central banks play a pivotal role in the gold market through their monetary policies and gold buying and selling operations within their reserves. In recent years, many central banks have increased their gold reserves to fortify their economies against currency fluctuations and inflation. Gold purchases by countries like China, India, and Russia have significantly impacted prices, leading to consecutive increases. In Saudi Arabia, the central bank holds a portion of its reserves in gold, which enhances currency stability and reduces risks associated with dollar fluctuations. Central bank movements remain a powerful factor influencing global gold price trends.

Global gold prices are expected to continue fluctuating in the coming period, driven by changes in global monetary policies, geopolitical tensions, and shifts in industrial supply and demand. The average price is likely to remain close to $2000 per ounce in 2025, with periods of sharp fluctuations in the event of economic crises or escalating international disputes. Demand from central banks and individual investors will continue to support prices, while technical factors and production costs will define the limits of declines. In Saudi Arabia, gold will remain an essential part of investment and hedging tools for individuals and institutions.