Gold Price in Saudi Arabia: Comprehensive Analytical Overview

Gold prices are determined globally as a result of trading on major global exchanges, such as the London Bullion Market (LBMA) and New York (COMEX), where it is typically priced in U.S. dollars per ounce (approximately 31.1 grams of 24-karat gold). The pricing process is influenced by global supply and demand forces, economic growth forecasts, interest rates, and geopolitical risk levels. For example, when fears of inflation increase or political crises intensify, investors turn to gold as a safe haven, driving its price up.

In the Saudi market, this global price is translated into Saudi riyals. Since the Saudi riyal is pegged to the U.S. dollar under a fixed exchange rate system, any change in the gold price in dollars is reflected almost proportionately in the riyal, with slight differences due to conversion costs and local taxes. Typically, gold is measured in Saudi Arabia by the gram (either 21 or 24 karats) and is traded in jewelry stores or through banking products. For example, if the price of an ounce of gold reaches $3,400 in April 2025, the price per gram (24 karat) would be approximately 1,100 Saudi riyals, while the price of 21 karat gold per gram in stores would be around 620 riyals, as reported in June 2025.

It is noteworthy that the Saudi market does not yet offer direct trading instruments in gold (such as ETFs), but investors track prices through global indices or purchase physical gold from the local market. Local sites like 'Argaam' play a prominent role in updating and analyzing prices, allowing Saudi investors to monitor price movements in real-time and locally.

Gold prices are influenced by a complex set of global economic factors, primarily economic growth, inflation expectations, central bank policies, and global interest rates. When economic indicators signal a slowdown in growth or rising inflation rates, investors turn to gold as a safe haven to hedge their portfolios against currency devaluation. For instance, during the period from 2022 to 2025, the global economy witnessed a significant rise in inflation rates, leading to increased demand for gold and pushing its prices to record levels exceeding $3,400 per ounce at certain times in 2025.

Interest rates play a pivotal role in determining gold's attractiveness. When interest rates rise, income-generating assets such as bonds become relatively more appealing, reducing demand for gold, which does not yield cash returns. This was evident in late 2024, where a Reuters report indicated that expectations of U.S. interest rate hikes drove gold prices down to $2,596.89 per ounce. Conversely, when investors anticipate interest rate cuts or continued accommodative monetary policies, demand for gold increases as a means of preserving value.

Geopolitical factors are also significant. Major events such as wars, political crises, or U.S. elections create uncertainty in markets, driving investors toward gold as a safe haven. An example of this was the escalation of tensions in the Middle East in June 2025, which caused the price of gold to surge to over $3,370 per ounce. Finally, the impact of significant movements in currency markets, especially the U.S. dollar, cannot be overlooked, as gold is priced globally in dollars, and any decline in the dollar's value enhances gold's attractiveness and raises its price.

Although the gold price in Saudi Arabia is primarily linked to the global price, several local factors influence its final price in the market. Foremost among these factors is the exchange rate of the Saudi riyal against the U.S. dollar, as the riyal is pegged to the dollar under a fixed exchange rate system, making any change in the global gold price directly reflected in the local market. However, there are additional factors to consider.

Among the most notable local factors are seasonal supply and demand in the Saudi market. During wedding seasons and religious occasions, demand for gold significantly increases, sometimes leading to local prices exceeding global prices due to heightened demand and limited supply at certain times. Additionally, the operational costs of jewelry stores, customs duties, or taxes on imports (although often low) also influence the final price per gram.

The government’s role is also important. The Saudi Arabian Monetary Authority (SAMA) holds part of its reserves in gold, which adds stability to the market and enhances confidence in the Saudi riyal. On the other hand, there are currently no traded investment funds for gold or official futures contracts in the Saudi market, prompting investors to focus on purchasing physical gold or monitoring global prices only. Finally, the local market is influenced by economic media and coverage from local sites like 'Argaam' and 'Riyadh Municipality,' which provide daily data on prices, contributing to market awareness and making prices more transparent for consumers and investors.

Central bank policies worldwide, especially those of the U.S. Federal Reserve, play a crucial role in determining gold price trends. When the Federal Reserve raises interest rates, investing in bonds and income-generating assets becomes more attractive, typically leading to a decrease in demand for gold, which does not provide direct cash returns. This effect was clearly seen at the end of 2024, when gold lost about 2% of its value within a week as signs of a slowdown in U.S. interest rate cuts emerged.

Conversely, when the Federal Reserve or other major central banks hint at interest rate cuts or adopting expansionary monetary policies (such as printing money or quantitative easing programs), demand for gold increases as a safe haven against inflation and currency devaluation. During the period from 2021 to 2022, for example, monetary expansion in the U.S. and the European Union prompted investors to shift part of their portfolios into gold, contributing to pushing its prices above $2,000 per ounce.

The Saudi central bank (SAMA) also follows monetary policies consistent with the U.S. dollar due to the riyal's peg to the dollar. This means that any changes in U.S. monetary policy are almost immediately reflected in the monetary environment in Saudi Arabia, and thus on local gold prices. Additionally, SAMA holds part of its reserves in gold, which enhances market stability and provides greater confidence for investors. Finally, it cannot be overlooked that central bank decisions regarding interest rates and liquidity provision also affect global capital flows, and thus the demand for gold as a long-term strategic asset.

Historically, gold has been associated with being a 'safe haven' during financial and geopolitical crises. When investors feel uncertainty or fear about currency devaluation due to inflation or banking crises, they often turn to gold to preserve their wealth. In Saudi Arabia, this trend is reinforced by the social tradition that views gold as a foundation for financial security, as well as being part of the cultural heritage in major events such as weddings.

Recent examples abound. In 2022, with the outbreak of the Russia-Ukraine war and rising global inflation rates, gold prices saw significant increases. In 2025, escalating tensions in the Middle East and uncertainty regarding U.S. policies led to historic jumps in gold prices, with the ounce exceeding $3,400 and the price per gram in Saudi Arabia reaching around 620 riyals (21 karats), according to June 2025 reports. These movements confirm that gold is not only a means of hedging against inflation but also a tool for wealth protection in the face of crises.

Globally, major central banks tend to increase their gold reserves during times of financial instability, as seen during the 2008 global financial crisis, which supports demand and raises prices. In Saudi Arabia, the pace of gold purchases by individuals increases during periods of tension or market downturns, reflected in the heightened interest in jewelry stores and the purchase of gold bars and coins. This behavior reflects the community's recognition of gold's role as a store of value and a means of hedging against market risks.

Gold is not the only precious metal attracting investors' interest; it competes with silver and platinum for capital, especially during economic volatility. The relationship between these metals is not static but is influenced by economic, industrial, and consumer factors. For example, at the end of 2024, the price of an ounce of gold was around $2,596.89, while silver prices ranged between $28.5 and $29 per ounce, and platinum was around $920-930 per ounce, as reported by Reuters.

Silver is widely used in industry, making its demand more sensitive to economic growth than gold. During industrial recovery periods, silver prices may rise faster than gold. Platinum, on the other hand, is significantly involved in the automotive and luxury jewelry industries, making it more susceptible to fluctuations in the automotive and industrial sectors. Nevertheless, gold remains the traditional store of value and the primary safe haven, especially during times of crisis.

In the Saudi market, the greatest focus is on gold, but there is a growing segment of investors beginning to track silver and platinum prices as options for hedging or investment diversification. It is important to note that the relationship between the prices of these metals is not always direct; gold may rise sharply due to political tensions while silver or platinum may decline due to weak industrial demand. Therefore, monitoring the movements of these metals together provides a broader view of market conditions and helps investors understand the dynamics of the precious metals sector more deeply.

Gold prices experienced significant fluctuations during 2024 and 2025 due to the interplay of global economic and political factors. At the end of 2024, the spot price of gold recorded approximately $2,596.89 per ounce, down about 2% within a week due to expectations of U.S. interest rate hikes, according to Reuters reports. Meanwhile, gold futures rose during the same period to around $2,611.30 per ounce, reflecting the volatility of expectations in financial markets.

At the beginning of 2025, gold witnessed a historic rise, surpassing the $3,000 per ounce mark in the first quarter for the first time in its history, reaching levels exceeding $3,400 per ounce by the end of April 2025. The average price per gram (24 karats) in Saudi Arabia was around 1,100 riyals, while the price of 21 karat gold per gram was about 620 riyals, according to mid-June 2025 reports. These jumps were driven by increasing tensions in the Middle East, a relative weakening of the U.S. dollar, and expectations of continued global inflation.

Silver maintained its levels between $28.5 and $29 per ounce, while platinum ranged between $920 and $930. These figures reflect the strong interaction between economic and political factors in shaping the movements of precious metal prices. Notably, there was a significant increase in the search volume and interest in gold prices in Saudi Arabia compared to 2023, indicating a growing awareness among local investors of the importance of monitoring the movements of the yellow metal. Overall, this data confirms that gold prices are not static but continuously change according to global and local fluctuations.

Gold occupies a central position in the Saudi economy, not only as an investment asset or store of value but also as a fundamental element in culture and society. Gold is widely used in social occasions, especially weddings and religious events, where it is considered part of the dowry or gifts for emancipation. This continuous consumer demand enhances the stability of the local gold market and makes it relatively less sensitive to some global fluctuations compared to other markets.

Economically, the gold sector supports the retail sector (traditional and electronic jewelry stores) and provides job opportunities for thousands of Saudis. Gold traders rely on global prices to price their products, making the local market closely linked to global price movements while retaining its peculiarities regarding seasonal demand and local customs. For example, during summer or Ramadan seasons, demand significantly increases, driving local prices up even if they are stable or low globally.

On the other hand, gold contributes to diversifying the reserves of the Saudi central bank (SAMA), providing additional strength to the Saudi riyal against economic fluctuations. Although Saudi Arabia is not one of the largest gold producers globally, its consumption is high, relying heavily on imports to meet local demand. Compared to other assets such as real estate or stocks, gold remains a preferred option for a wide segment of Saudis, especially during times of economic uncertainty. Finally, local economic media plays an important role in raising awareness about price movements and the importance of managing risks associated with gold.

As of 2025, there are no official channels for trading gold as a financial asset through the Saudi trading platform, meaning there are no exchange-traded funds (ETFs) or official futures contracts for gold in the local market. Instead, the main investment channels in gold are based on purchasing physical metal (bars, coins, jewelry) from jewelry stores or through some banking products that allow for the purchase of actual gold or gold-backed securities.

Some Saudi banks offer individual investors programs to purchase gold through securities or gold-backed accounts, which are products that allow for the purchase of specific quantities of gold stored at the bank or in approved vaults. These tools help mitigate the risks of physical gold ownership (such as theft or loss), but they remain limited compared to what is available in global markets. Investors looking to diversify their portfolios globally typically resort to investing in gold funds listed on European or U.S. exchanges or purchasing shares of global gold mining companies.

Investing in physical gold requires investors to pay attention to the price differences between buying and selling (the spread), storage costs, and purchase fees at jewelry stores. On the other hand, Saudi investors monitor global price movements through sites like Bloomberg and Kitco, relying on local sites like 'Argaam' and 'Riyadh Municipality' to track daily prices in riyals per gram. This pattern of precise monitoring reflects local market awareness and enhances investors' ability to make informed buying or selling decisions.

Gold is classified within the precious metals sector, which is part of a commodity asset class that also includes silver, platinum, and palladium. The precious metals sector is characterized by its unique ability to attract capital during financial crises, especially when confidence in traditional financial assets like stocks or bonds declines. In Saudi Arabia, gold is an essential part of financial hedging strategies, alongside real estate and stock investments.

However, gold does not only compete with other precious metals but also with other investment assets such as high-quality securities (like U.S. government bonds), other commodities (like oil), and even cryptocurrencies. For example, during periods of rising oil prices, Saudi investors may turn to invest in the energy sector, while during times of economic tension or a weak dollar, gold's attractiveness as a safe haven increases. On the other hand, cryptocurrencies like Bitcoin are increasingly competing with gold, but they have not yet reached the same level of global liquidity that gold enjoys.

Global mining companies like Barrick Gold and Newmont play a pivotal role in determining the global supply of gold, while in Saudi Arabia, Ma'aden (1211) stands out as a major producer of precious metals, although gold is not its only product. It is worth noting that the local gold market relies heavily on imports due to limited domestic production, making the Saudi market more sensitive to changes in global prices. Finally, the precious metals sector as a whole reflects complex economic dynamics that combine global supply, local demand, and geopolitical and economic events, necessitating careful monitoring and continuous analysis.

Geopolitical and economic events play a crucial role in determining gold price trends in the short and medium term. Major political crises, such as wars or regional confrontations, often drive investors to seek gold as a safe haven, leading to rapid price increases. For example, in June 2025, escalating tensions in the Middle East caused the price of gold to jump to over $3,370 per ounce, as reported by Reuters, due to increased demand from wealthy investors and financial institutions.

Global economic crises, such as sudden downturns or market collapses, also lead to increased demand for gold. During periods of rising inflation or loss of confidence in major currencies, gold becomes a preferred haven for wealth protection. Historically, gold has seen significant increases during the 2008 global financial crisis, the European debt crisis, and the COVID-19 pandemic in 2020.

In times of political and economic stability, demand for gold may decrease in favor of higher-yielding assets such as stocks or bonds. Additionally, U.S. elections play a significant role in directing global markets, as the economic policies of the new administration can impact the dollar, interest rates, and thus gold's attractiveness. In Saudi Arabia, despite relative political stability, the gold market is directly affected by regional and global developments, making monitoring news and analyses essential for understanding price movements.

Although the Saudi financial market does not include a large number of listed companies that deal directly with pure gold, there are prominent companies operating in the precious metals sector, most notably the Saudi Arabian Mining Company (Ma'aden - 1211). Ma'aden is a leading mining company in the Kingdom, producing gold among a wide range of minerals, including phosphate, aluminum, and copper.

Ma'aden's performance is indirectly affected by global gold price movements. Rising gold prices contribute to increased revenues in the relevant sector, while the company also depends on the performance of other mineral sectors. It is noteworthy that Ma'aden focuses on developing new mines and improving extraction and processing techniques, aiming to enhance its contribution to the Saudi economy and reduce reliance on imports.

In addition to Ma'aden, there are family-owned companies and specialized companies in jewelry manufacturing and gold trading that play a pivotal role in meeting the growing local demand for gold and jewelry. These companies base their product pricing on global prices, adding manufacturing costs and local taxes. Although there are currently no Saudi gold exchange-traded funds, the sector is gradually evolving towards offering new financial products backed by gold, such as gold-backed securities. Overall, the gold and precious metals sector represents a vital element in the Saudi economy, with expectations for further development and innovation in the coming years.

Monitoring gold prices daily is essential for investors, jewelry traders, and even individuals in Saudi Arabia. The tools available for this purpose are diverse, including global financial websites like Bloomberg, Kitco, and CNBC, which provide real-time data on gold prices in dollars per ounce. Locally, 'Argaam' offers daily updates on gold prices in Saudi riyals for each gold karat (21 and 24 karats), along with analysis of the differences between buying and selling prices in the local market.

Saudi economic newspapers like 'Al-Eqtisadiah' and 'Riyadh Municipality' play a crucial role in conveying news and analyses about gold price movements, helping investors and individuals make informed decisions about buying or selling. Some Saudi banking applications also provide gold price monitoring services, along with the ability to purchase bars or gold coins online from authorized jewelry stores.

It is important for investors to realize that gold prices can change several times during the day based on global market movements, especially with the release of economic data or significant political news. Therefore, real-time monitoring is a vital tool, especially for those planning significant buying or selling operations. Finally, the increased volume of searches for gold prices in Saudi Arabia during 2024 and 2025 reflects a growing awareness among investors of the necessity to monitor market movements and the importance of making financial decisions based on accurate and reliable data.

Investment methods in gold in the Saudi market vary to include traditional options and more modern ones. The most common option is purchasing physical gold, such as bars, gold coins, or jewelry from authorized stores. This method allows the investor to own gold physically, but it requires bearing storage costs and protection from risks such as theft or loss, in addition to the buying and selling price differences (the spread) that may be relatively high.

There are also banking products offered by some Saudi banks, such as purchasing gold through securities or gold-backed accounts, where the bank holds the gold on behalf of the client. These products provide greater flexibility and higher security in terms of storage, but they remain limited in diversity compared to products available in global markets. Investors looking for indirect investment can buy shares of gold mining companies listed on global exchanges or invest in gold exchange-traded funds (ETFs) outside Saudi Arabia.

Each option carries advantages and risks. Physical gold is considered safer during crises but is less liquid than modern financial instruments. Investing in shares of mining companies or gold funds offers higher liquidity and greater diversification but exposes the investor to fluctuations in financial markets. It is always advisable to diversify the portfolio and not allocate all capital to a single asset, considering the financial goals and risk tolerance of each investor. Finally, consulting a licensed financial advisor before making any investment decision is crucial to ensure the best choice for each situation.