Gold: The Complete Guide to Gold Prices and Investment in Saudi Arabia

Gold, known locally as "Gold", is considered one of the most important financial assets with unparalleled historical and economic value in Saudi Arabia. Historically, gold has been associated with wealth and financial security, serving as a store of value against market fluctuations and economic crises. In the Saudi context, gold has acquired a cultural dimension alongside its economic significance; it symbolizes generosity and prosperity and is widely used in social occasions such as weddings and formal events.

From a financial perspective, gold represents a safe haven for investors due to its stable value over the long term compared to fiat currencies that may be subject to inflation or depreciation. During periods of economic or political turmoil, Saudi investors turn to gold as a hedging tool to protect their wealth, especially since the Saudi financial market is closely linked to global markets through the riyal's peg to the US dollar.

The Saudi Capital Market Authority regulates all transactions related to gold, whether purchasing bullion or gold coins or investing in exchange-traded funds. A 5% value-added tax and additional fees on luxury products are imposed, making purchasing operations more transparent and reliable. The Saudi market offers various options for investing in gold, from direct purchases of physical gold to modern financial instruments such as exchange-traded funds (ETFs) or even buying shares of companies operating in the mining sector.

Gold gains additional importance as an indicator of purchasing power in the Kingdom, reflecting macroeconomic movements such as rising or falling oil prices, making its monitoring essential for anyone looking to hedge or diversify their financial portfolio. In summary, "Gold" is not just a luxury commodity in Saudi Arabia; it is part of the economic system that contributes to market stability and wealth protection.

There are various methods for investing in gold within the Saudi market, ranging from direct investment in physical gold to indirect investment through traded financial instruments. The first option, direct investment, includes purchasing gold bullion or coins from licensed shops or banks. Gold bullion is characterized by high purity (usually 24 karats) and is available in various weights ranging from 1 gram to one kilogram or more. Gold coins, such as the gold dinar or the British pound, are also in demand among investors seeking liquidity and ease of storage. In the Saudi markets, these products can be purchased from major gold shops or through banks that offer secure storage services for additional fees.

Indirect investment is available through a range of financial instruments, most notably gold exchange-traded funds (ETFs), such as the Al-Bilad Gold Fund listed on Tadawul. These funds allow investors to purchase units that reflect the global gold price, with only administrative costs accounted for, without the need to acquire physical gold. The traded funds provide high flexibility and immediate liquidity, as units can be bought and sold easily through the Tadawul platform just like stocks.

Additionally, investors can invest in shares of gold mining companies or companies related to the gold industry, although this option is limited within the Saudi market compared to global markets. Some Saudi banks have also started offering investment accounts linked to the gold price, allowing for the purchase of virtual gold and liquidating it when needed.

Each investment method has its advantages and disadvantages; direct investment provides physical ownership but incurs higher storage and insurance costs, while indirect investment offers ease and speed of trading with risks associated with financial market performance. In all cases, investors should monitor global gold prices, understand local tax regulations, and choose accredited institutions to ensure the quality and safety of their investments.

Gold prices have experienced notable fluctuations globally during 2024 and 2025, influenced by various factors such as global inflation, geopolitical tensions, and the policies of major central banks. The global price of gold reached historic levels exceeding $2070 per ounce in March 2024, before stabilizing between $1900 and $2000 until early 2025. This significant increase is attributed to rising demand for safe havens amid economic uncertainty, coupled with increasing government debt levels worldwide.

For the Saudi market, the peg of the Saudi riyal to the US dollar translates global price movements directly into local prices. For example, the price of gold per ounce in mid-2024 exceeded 7500 Saudi riyals, with the exchange rate remaining stable at 3.75 riyals to the dollar. The price of 24-karat gold per gram ranged between 230 and 240 riyals in local markets during the same period, with slight variations depending on the city or retail outlet. These prices are subject to selective tax and manufacturing or retail fees, leading to minor differences between shops and banks.

Official reports from the International Monetary Fund and commercial chambers in Saudi Arabia indicated that demand for gold in the local market witnessed moderate growth during 2024, driven by increased interest in jewelry and investment in bullion and coins. Activity in exchange-traded funds such as the Al-Bilad Gold Fund continued, with its unit price reaching approximately 20.8 riyals in the first half of 2025.

On another note, data indicated that Saudi Arabia holds gold reserves exceeding 320 tons, making gold a significant part of the foreign reserves held by the Saudi Arabian Monetary Authority (SAMA). This enhances gold's position as a strategic asset in the national economy, providing the local market with greater stability and confidence in the face of global market fluctuations.

The gold sector in the Kingdom of Saudi Arabia is subject to a strict regulatory framework aimed at achieving transparency, protecting investors, and ensuring the safety of financial transactions. The Saudi Capital Market Authority (CMA) oversees all financial instruments related to gold, including exchange-traded funds and shares of companies linked to gold. Individuals and companies are required to comply with local regulations when buying or selling gold, whether through the cash market or official trading platforms.

Among the prominent regulatory controls is the imposition of a 5% value-added tax on gold bullion and coins, in addition to the selective tax on luxury products. These taxes directly affect the final price of physical gold and are calculated when purchasing from licensed shops or banks. Furthermore, regulatory bodies require gold shops to adhere to strict quality and purity standards, with stringent oversight on documentation and testing processes, reducing the risks of fraud or manipulation.

Regarding investment in gold exchange-traded funds (ETFs), these funds must be licensed by the Capital Market Authority and are subject to regular reviews in terms of financial disclosure and risk management. This regulatory framework allows investors to access investment products compliant with Islamic law, ensuring the safety of operations and fair pricing.

Saudi regulations also impose controls on cross-border transfer and transport of physical gold, especially for individuals wishing to export or import large quantities. This requires obtaining official permits and full disclosure of the sources of funds. For international investors, Saudi Arabia adopts anti-money laundering and counter-terrorism financing standards, making investment in gold through the Saudi market more reliable and secure compared to some other markets in the region.

These regulations collectively aim to create a healthy and sustainable investment environment where local and international investors can confidently engage with the Saudi gold market while fully complying with all legal and regulatory requirements.

Gold (Gold) is one of the most prominent financial hedging tools that investors around the world, particularly in Saudi Arabia, resort to in order to protect their wealth from erosion caused by inflation or fluctuations in financial markets. Gold is characterized by its ability to retain its value over the long term, even during times of economic crises and political turmoil. Therefore, gold is viewed as a safe haven, especially when fiat currencies are under pressure or experiencing a decline in purchasing power.

In the Saudi market, gold is used as a fundamental element in diversifying investment portfolios, as it can reduce risks associated with other assets such as stocks or real estate. When corrections or downturns occur in financial markets, gold prices often rise due to increased demand for it as an asset not closely linked to traditional market fluctuations. This balance makes gold an ideal option for investors seeking relative stability and protection from systemic risks.

A notable example of gold's effectiveness as a hedging tool in Saudi Arabia was observed during the COVID-19 pandemic and the subsequent economic disruptions from 2020 to 2024. During this period, gold prices surged significantly due to increased global demand amid uncertainty, while stock markets experienced sharp fluctuations. For local investors, investing in gold, whether directly (bullion, coins) or through exchange-traded funds, helped preserve part of their financial portfolio's value.

With the Saudi riyal's peg to the US dollar, global gold price movements directly reflect in the local market, making it essential for investors in Saudi Arabia to monitor news and international reports. Additionally, the presence of specialized investment funds in gold, such as the Al-Bilad Gold Fund, provides flexible and easily tradable hedging options without the burden of storage or insurance costs.

Overall, gold remains a fundamental choice in hedging strategies and portfolio diversification, especially in an economic environment characterized by uncertainty and frequent changes.

Gold exchange-traded funds (Gold ETFs) are among the most prominent modern financial tools that allow Saudi investors to benefit from fluctuations in gold prices without the need to acquire the metal itself. Among these funds, the "Al-Bilad Gold Fund" stands out as the first traded fund in the Saudi market that simplifies and transparently allows investment in gold.

This fund is managed by Al-Bilad Financial Company and is traded in the Saudi market in the same way as stocks, providing high liquidity and ease of entering and exiting investments. The pricing of the fund's units is primarily based on the global gold price in dollars, plus administrative expenses and annual fees. In the first half of 2025, the price of a unit of the Al-Bilad Gold Fund was approximately 20.8 Saudi riyals, with slight fluctuations mirroring movements in international gold markets.

Gold ETFs provide a key advantage for investors by avoiding the storage and insurance costs associated with physical gold, in addition to allowing investment with smaller amounts compared to purchasing bullion or coins. These funds also facilitate portfolio diversification, especially for individual investors looking to hedge against inflation or market fluctuations.

It is worth noting that investing in gold funds is subject to the regulations of the Saudi Capital Market Authority and is considered safer and more transparent than informal options or black markets. Additionally, these funds are often compliant with Islamic law, enhancing their appeal in the local market.

With the increasing trend towards digitization and the development of financial products in Saudi Arabia, the popularity of gold exchange-traded funds is expected to rise, with more similar funds emerging in the coming years, providing investors with more flexible and diverse options for managing their wealth.

Gold (Gold) and stocks represent key investment tools in the Saudi financial market, each with its characteristics that make it suitable for different investment objectives. Gold is primarily considered a hedging asset, retaining its value during crises and mitigating the impact of inflation on investment portfolios. On the other hand, stocks offer higher growth opportunities and periodic returns through dividends, but they are more susceptible to macroeconomic factors and market fluctuations.

In recent years, the Saudi market has seen increased interest in both assets. Demand for gold has risen amid inflationary concerns and global uncertainty, while stocks, particularly shares of major companies like Hail Cement, continue to attract investors seeking stable cash returns. Hail Cement's stock, for example, has distinguished itself with annual cash distributions between 3% and 6% and a low price-to-earnings ratio (P/E between 8 and 10), making it an attractive option for income portfolios.

However, stocks carry higher risks associated with company performance, sector changes, and government and local economic policies. During economic downturns or sharp market fluctuations, stock prices may decline significantly, while gold tends to maintain its stability or even rise. Conversely, gold does not generate periodic income like stocks, and investors do not benefit from dividends or capital growth at the same rate as successful stocks.

Financial literature typically recommends asset allocation between gold and stocks to achieve a balance between safety and growth. In Saudi Arabia, this trend has become more evident with the increasing investment options available, such as gold exchange-traded funds and stable-yield industrial stocks. The appropriate ratio between gold and stocks depends on the investor's objectives, risk tolerance, and time horizon, with a need to consult a licensed financial advisor before making any investment decisions.

Hail Cement Company (Ticker: 3001) is one of the medium-sized companies in the basic industries sector of the Saudi financial market. Established in the 1980s in Hail city in the north of the Kingdom, the company aims to meet the needs of the construction sector in the northern region. The company produces various types of cement, with Portland cement being widely used in civil and industrial construction.

According to financial data at the end of 2024, the price of Hail Cement's stock ranged between 30 and 35 Saudi riyals, with a total market value ranging between 4 and 5 billion riyals, based on the number of shares traded (130–150 million shares). The price-to-earnings ratio (P/E) for the stock is relatively low, ranging between 8 and 10 times during 2024, indicating an attractive valuation compared to other companies in the industrial sector. This low valuation may reflect investor caution regarding the cement sector or limited growth expectations for profits.

In terms of cash distributions, the company has maintained a moderate annual dividend distribution policy of around 3–6% of the stock value, equivalent to 0.30–0.50 riyals per share annually. In 2024, total distributions amounted to about 5% of capital (0.50 riyals per share), reflecting the company's commitment to incentivizing shareholders while maintaining liquidity to support expansion plans.

The company has seen an improvement in its net profits during the second and third quarters of 2024, driven by increased sales and reduced capital costs. While the company covers a strategically important area geographically, it remains closely linked to government infrastructure projects and construction activity in northern Saudi Arabia. Despite some challenges related to energy price fluctuations and increased competition, Hail Cement continues its efforts to enhance production efficiency and diversify its products, strengthening its competitiveness in the local and regional market.

The cement sector in Saudi Arabia falls under the essential sectors that support economic development plans and national infrastructure, especially with the massive urban expansion witnessed by the Kingdom under Vision 2030. This sector consists of several listed companies, including Hail Cement, Qassim Cement, Yamama Cement, and the Saudi Cement Company, among others. The sector is experiencing strong competition, with companies competing to provide cement for construction, housing, roads, and bridges, in addition to export opportunities to Gulf countries and neighboring nations.

The profitability of companies in the cement sector primarily depends on domestic demand, which is influenced by major government infrastructure and housing development projects. In recent years, the Saudi cement industry has witnessed a wave of expansion with the launch of major projects such as NEOM, Qiddiya, and large housing projects. However, companies face significant challenges, most notably the volatility of energy prices, which constitute a substantial part of operating costs, along with stringent environmental requirements related to carbon emissions.

Geographically, cement plants are distributed to cover different regions of the Kingdom. Hail Cement focuses on the north, while companies like Qassim Cement and Yamama Cement are centered in the central and southern regions. Competition among these companies drives improvements in production efficiency, adoption of environmentally friendly technologies, and attempts to reduce costs to ensure profitability. Additionally, overproduction poses an extra challenge, prompting some companies to focus on exports to compensate for declining domestic demand during certain periods.

With the tightening of government environmental regulations and increasing sustainability requirements, many companies have begun investing in modern production technologies and using more efficient fuel alternatives. This trend not only benefits the environment but also enhances the competitiveness of companies and the sustainability of the sector in the long term.

In summary, the cement sector in Saudi Arabia is characterized by strong competition and a variety of players, with significant growth opportunities amid government projects, but it faces challenges related to costs, the environment, and fluctuating demand.

The years 2024 and 2025 witnessed significant developments in the Saudi cement sector in general and in Hail Cement Company specifically. Financially, the company recorded notable growth in its net profits during the second and third quarters of 2024, achieving an increase of between 40% and 50% compared to the same period in 2023. This growth resulted from rising cement sales and reduced capital costs due to improvements in operational processes and production efficiency.

Strategically, Hail Cement announced plans to expand its existing production lines, targeting an increase in production capacity by 10–20% over the coming years. This direction aligns with the state's objectives to support the local building materials industry and reduce reliance on imports. The company also prioritizes investment in environmentally friendly modern technologies in response to new government regulations that emphasize energy efficiency and reducing carbon emissions by 2025–2026.

Regarding distributions, the company continued its policy of providing stable cash distributions to shareholders, as the board of directors proposed a dividend of about 5% of capital (0.50 riyals per share) for the year 2024, enhancing the stock's attractiveness for investors seeking stable returns.

In terms of exports, Hail Cement's exports saw a remarkable recovery to some Gulf countries during the second half of 2024, following a temporary decline in the previous year. The company aims to enhance the contribution of exports to its revenues in 2025 without resorting to significant price reductions, contributing to improving its profitability in the medium term.

It is noteworthy that the sector as a whole has benefited from the stability of the main market index (TASI) around 11,000 points, reflecting a state of relative stability and stimulating investment activity in cement companies. Companies are closely monitoring regulatory and economic developments to ensure continued growth and achieve their future objectives.

Combining gold (Gold) and stocks from the cement sector, such as Hail Cement, forms an effective strategy for diversifying the investment portfolio in Saudi Arabia. Both gold and stocks have unique characteristics that help balance risks and achieve different investment objectives. Gold is considered an asset not closely linked to stock market fluctuations, making it ideal for hedging against financial crises and sharp market downturns. In contrast, cement stocks, especially those with stable cash distributions like Hail Cement, provide a source of periodic income and an opportunity to benefit from local economic growth.

When the economy expands, and construction and infrastructure projects abound, cement companies' profits typically rise, positively reflecting on their stock prices and dividends. Conversely, during times of crises or rising inflation, investors tend to increase their holdings of gold to preserve their wealth's value. This performance divergence between gold and stocks is ideal for reducing overall portfolio volatility.

In the Saudi market, achieving this diversification is facilitated by the availability of various investment tools such as gold exchange-traded funds (ETFs) and shares of companies listed on Tadawul. For example, an investor can purchase units of the Al-Bilad Gold Fund alongside Hail Cement shares, benefiting from the returns of each asset based on its performance in the economic cycle.

Financial studies indicate that adding between 5% and 10% of gold to the portfolio can reduce overall risks without negatively impacting expected returns. At the same time, cement stocks offer growth and profitability potential aligned with the Saudi economy's growth and urban expansion.

It is essential for investors to determine the appropriate ratio between gold and stocks based on personal objectives, risk tolerance, and investment time horizon, with the necessity of periodically reviewing the investment plan according to market and economic changes.

Monitoring gold prices and the stocks of cement companies in Saudi Arabia requires using reliable sources and regularly analyzing financial indicators to make informed investment decisions. For gold, global prices can be tracked through sites like the World Gold Council and central bank websites, while platforms like Tadawul provide accurate data on local gold prices and the performance of exchange-traded funds such as the Al-Bilad Gold Fund.

For cement company stocks, their prices and indicators can be monitored through the Tadawul website, which offers real-time information on prices, trading volumes, cash distributions, and financial performance indicators such as the price-to-earnings ratio (P/E), market capitalization, and dividend payout ratio. Websites like Argaam provide periodic analyses of financial reports, allowing investors to compare the performance of companies within the same sector.

Among the key financial indicators to monitor in the cement sector are the price-to-earnings ratio (P/E), operating profit margin, dividend yield, and market capitalization. These indicators provide insights into a company's profitability, the attractiveness of the stock for long-term investment, and the sustainability of dividend distributions.

Regarding gold, the price per ounce in dollars and the price per gram in Saudi riyals are the most important indicators, along with the Kingdom's official gold reserves and changes in local demand according to chamber of commerce reports.

Regularly monitoring these indicators and official sources helps create a clear picture of current and future trends, enabling the investor to make informed decisions. It is always recommended to consult a licensed financial advisor to analyze data and relate it to personal investment goals.

Despite the numerous advantages of investing in gold (Gold) and shares of companies like Hail Cement, there are several challenges and risks that investors must be aware of before making any decisions. From the perspective of gold, the most significant risks lie in global price fluctuations, which are influenced by external factors such as central bank policies, geopolitical changes, and the movement of the US dollar. If the global economy improves and inflation rates decline, gold may face pressures that drive its prices down, negatively impacting the value of related investments.

As for shares of cement companies, the risks are multifaceted and include fluctuations in domestic demand for cement, intense competition among companies, volatility in energy and raw material prices, and regulatory changes, especially regarding environmental standards and carbon emissions. Economic downturns or slowdowns in construction projects may lead to decreased profits for companies, which in turn affects stock prices and dividend distributions. Additionally, the heavy reliance on government decisions and mega-projects makes the sector sensitive to any changes in policies or public budgets.

Furthermore, investing in gold exchange-traded funds carries additional risks such as annual management fees and market liquidity changes that may affect the actual returns for investors.

It is important for investors to recognize that any investment carries a degree of risk, and diversifying between gold and stocks can reduce these risks without eliminating them entirely. Investors should also stay updated on local and global economic news and regularly update their investment plans to adapt to changes in markets and the economy. In all cases, it is always advisable to consult a licensed financial advisor before making significant investment decisions.