Ounce: Everything You Need to Know About Gold Units in Saudi Financial Market

The ounce, or troy ounce, is an ancient unit of measurement rooted in civilizations that relied on the exchange of high-value goods such as gold and silver. The term "ounce" is used globally to refer to a fixed weight amount, which varies depending on the type of ounce used. In financial markets, the troy ounce (Troy Ounce), which equals 31.1035 grams, is primarily relied upon as the international standard for pricing precious metals such as gold, silver, platinum, and palladium. The regular ounce (Avoirdupois Ounce), which equals approximately 28.35 grams, is used for consumer and general measurements.

The use of the ounce dates back centuries, where it was adopted in London and New York markets to standardize buying and selling processes, allowing for the easy and transparent trading of gold and silver among traders and nations. As financial markets evolved, the ounce became the cornerstone in pricing gold and other metals, with global exchanges such as COMEX (New York) and LBMA (London) publishing prices based on it. Based on this standard, investors worldwide can compare prices and understand market movements without the need for complex conversions.

The ounce holds particular importance in the Arab world and specifically in Saudi Arabia, where communities still maintain traditions of acquiring gold as a safe haven and a savings tool. The ounce is also used in the monetary policies of central banks, where national gold reserves are calculated in ounces, giving it a strategic role in stabilizing national currencies. Thus, the ounce transcends being merely a unit of weight, becoming a global economic standard that connects different markets and cultures, influencing the decisions of investors and financial policymakers around the world.

Understanding the differences between the troy ounce and the regular ounce is essential for grasping how precious metals are measured and traded. The troy ounce (Troy Ounce) equals 31.1035 grams and is the standard unit for pricing gold and silver worldwide. The regular ounce (Avoirdupois Ounce), weighing 28.35 grams, is often used in the United States for measuring consumer goods such as meat and everyday items.

The troy ounce originated in the Middle Ages, where European traders used it to facilitate international trade in precious metals. Global markets adopted it due to its accuracy and consistency, making it the sole reference for pricing gold and precious metals in New York and London exchanges. In contrast, the regular ounce remains confined to non-financial uses and is not used in trading markets.

For investors in Saudi Arabia or any global market, monitoring gold, silver, or platinum prices should always be in troy ounces, not regular ounces or grams. This distinction is crucial in currency and metal conversion processes, especially when comparing global prices with the local market or when purchasing from jewelry stores or banks. Prices are often quoted to the end consumer in grams, but the global reference remains the troy ounce. This standardization allows for easy price comparisons across different countries and markets without confusion or error.

It is important to note that all international reports and most investment products related to gold and silver rely on the troy ounce. Even investment funds and exchange-traded funds (ETFs) tracking gold report their assets and results in troy ounces. This standardization enhances transparency and trust among investors and financial institutions worldwide.

The ounce plays a pivotal role in the Saudi financial market, representing the basic unit for pricing gold and silver, with its price movements immediately reflected in local prices in Saudi riyals. The ounce is viewed as a fundamental tool for hedging against inflation and economic uncertainty, which has allowed it to occupy a prominent place in Saudi investment culture for decades. During periods of economic volatility or rising inflation rates, investors and individuals turn to purchasing gold by the ounce as a means to protect the purchasing power of their assets.

Financial data shows that gold prices measured in ounces reached historic highs in 2024, surpassing $2,060 per ounce, before stabilizing around $1,850-$1,900 by mid-2025. These movements directly impacted the local market, with the ounce price reaching approximately 6,900 Saudi riyals at its peak, before settling around 6,700 riyals by the end of the year. This close correlation between the global and local markets highlights the importance of the ounce in shaping investment decisions.

Institutionally, central banks, including the Saudi Central Bank (SAMA), hold significant gold reserves measured in ounces. These reserves are used to enhance financial stability and support the local currency, especially during times of crisis. Additionally, some Islamic financial products, such as gold sukuk, rely on gold as a reference unit, further enhancing the ounce's presence in the financial system. The expansion of the Saudi mining sector and increased local gold production through companies like "Ma'aden" supports the strategic role of the ounce in the national economy.

In summary, the ounce represents more than just a unit of weight; it is a strategic measurement tool that influences monetary policy, institutional and individual investment, and plays a key role in stabilizing the Saudi economy amidst global fluctuations.

Ounce prices experienced notable fluctuations during 2024 and 2025, reflecting the sensitivity of precious metals to international economic and political events. In the first half of 2024, the price of gold per ounce rose to record levels, exceeding $2,060 for the first time since 2011, driven by expectations of high global inflation and central banks' moves toward more accommodative monetary policies. This coincided with escalating geopolitical tensions, which bolstered demand for gold as a safe haven.

As autumn approached, the price began to gradually decline, stabilizing between $1,900 and $2,000 per ounce, before dropping to around $1,850 by the end of 2024. Prices continued to fluctuate in mid-2025, with the ounce price ranging between $1,800 and $1,900, influenced by a decrease in some global pressures and a return to balance in interest rates amidst moderate economic growth. Silver peaked at $32 per ounce in May 2024, before retreating to $25-$26 by the end of the year.

Locally, these movements reflected on gold prices in the Saudi market, with the ounce value reaching its highest levels at 6,900 Saudi riyals in mid-2024, before declining to around 6,700 riyals by the end of the year. This interdependence between global and local markets underscores the Saudi market's reliance on the ounce as a key standard for pricing gold. Platinum and palladium prices were also affected, with platinum ounces ranging between $800 and $1,000, and palladium ounces around $2,800-$3,000, driven by global supply shortages.

These data illustrate that ounce prices do not follow a fixed path but are influenced by a complex array of economic and political factors. Therefore, understanding price dynamics and analyzing global indicators remains essential for any follower or investor in the precious metals sector in Saudi Arabia.

Ounce prices are influenced by several interrelated factors at both global and local levels, making it one of the most sensitive financial indicators to economic and political changes. The first of these factors is the monetary policies of central banks, where raising interest rates strengthens the U.S. dollar, leading to a decrease in demand for dollar-denominated gold, while lowering rates increases gold's appeal as a safe haven. In 2024, the policies of the Federal Reserve and the European Central Bank had a clear impact on ounce price fluctuations.

The second factor is global inflation, where investors turn to gold to hedge against declining purchasing power of currencies. Periods of rising inflation in 2024 saw a noticeable increase in demand for the ounce, driving prices to historic levels. Additionally, geopolitical tensions, such as conflicts in the Middle East and Eastern Europe, prompt investors to seek safe assets like gold.

Locally, the ounce price is also affected by the exchange rate of the dollar against the Saudi riyal. When the dollar weakens, gold prices in riyals rise, and vice versa. Local supply and demand levels also play a role in determining prices, especially with the expansion of local mining operations and increased gold production from national companies.

It is noteworthy that competition from alternative assets such as cryptocurrencies (like Bitcoin), real estate, and stocks also affects demand for the ounce. In times of market stability or rising returns from other assets, demand for gold may decrease, putting pressure on ounce prices. Finally, government initiatives, such as increasing gold reserves at the Saudi Central Bank or organizing exhibitions to showcase national gold, enhance the ounce's status as a local investment tool.

In summary, understanding ounce price trends requires careful monitoring of a wide range of economic and political indicators, both locally and globally, along with a thoughtful reading of developments in related financial markets.

The ounce plays a strategic role in managing international reserves and monetary policies of countries, including Saudi Arabia. Central banks worldwide, led by the Saudi Central Bank (SAMA), hold part of their reserves in the form of gold measured in ounces. Gold is considered a safe asset not directly linked to currency fluctuations or sovereign debts, giving it a special status in the structure of international reserves.

In times of financial crises or geopolitical disruptions, many central banks increase their gold reserves to enhance confidence in the local currency and support financial stability. For example, data from 2024 showed that several countries, including Saudi Arabia, increased their gold reserves in response to rising global inflation and currency price fluctuations. This reserve is always measured in troy ounces, adding transparency and standardization to international financial reports.

The importance of the ounce lies in the ease of converting the value of gold reserves into international currencies or using it as collateral when borrowing or supporting the local currency. The larger the gold reserve measured in ounces, the greater the country's ability to withstand sudden fluctuations in currency or commodity markets. Gold is also used as collateral for some Islamic financial products, such as gold sukuk, further enhancing the ounce's role in national monetary policies.

Moreover, ounce prices are used as an indicator of the strength or weakness of countries' economic policies. When gold prices rise, it is often interpreted as a sign of market concern about growth prospects or financial stability, prompting central banks to adjust their policies. In Saudi Arabia, these movements translate into decisions regarding national reserve management and are directly reflected in the local gold market and ounce prices in riyals. Thus, the ounce solidifies its position as a central tool in macroeconomic pathways and financial risk management.

The relationship between the ounce and the U.S. dollar exchange rate is one of the most complex and impactful economic relationships in pricing precious metals globally. Gold, like many commodities, is priced in U.S. dollars on international exchanges such as COMEX and LBMA, making dollar movements a crucial factor in determining the ounce price.

When the U.S. dollar weakens against other currencies, dollar-denominated assets, particularly gold, become cheaper for foreign currency holders. This leads to increased demand for gold, driving the ounce price up. Conversely, when the dollar strengthens, global demand for gold decreases, and ounce prices fall. This inverse relationship was clearly evident in 2024, where U.S. Federal Reserve policies and interest rate changes caused dollar fluctuations, which directly reflected on ounce prices.

In Saudi Arabia, this factor gains additional importance due to the Saudi riyal's peg to the U.S. dollar. Despite this peg, local gold prices remain susceptible to dollar fluctuations in global markets. When the ounce price rises internationally due to a weak dollar, its value in riyals increases, and vice versa. Therefore, Saudi investors closely monitor developments in the global dollar index and consider them when tracking gold and ounce prices in the local market.

It is worth noting that the relationship between the dollar and the ounce does not operate in isolation from other factors such as inflation, interest rates, and geopolitical tensions. However, the dollar remains the most apparent and influential factor in pricing the ounce globally and locally. Thus, understanding this relationship is essential for any investor or follower of precious metals markets in Saudi Arabia.

When discussing the ounce in the context of investment and precious metals, three main metals stand out: gold, silver, and platinum, each with its own characteristics and behaviors in financial markets. The ounce is used as a standardized unit for these metals, allowing investors to easily compare performance and price.

Gold is the most famous and widely used metal in investment, regarded as a safe haven during economic crises. In 2024, the price of gold per ounce exceeded $2,060 before stabilizing between $1,800 and $1,900 in 2025. Silver, although less valuable by weight, experienced sharp fluctuations, peaking at $32 per ounce in May 2024 before retreating to $25-$26. Silver is distinguished by its wide industrial uses, making its prices more sensitive to changes in industrial demand alongside investment.

Platinum, a rare metal used in automotive and jewelry manufacturing, saw its ounce price range between $800 and $1,000 in 2024. Its price is often influenced by supply shortages and new discoveries, along with shifts in industrial demand. Palladium also stands out as another precious metal, with its ounce prices ranging between $2,800 and $3,000 during the same period.

The importance of comparing these metals lies in the fact that each responds to different market factors. Gold is preferred in times of crises, while silver and platinum gain attractiveness during industrial sector recoveries. Using the ounce as a standardized measurement allows Saudi and international investors to assess investment opportunities and asset allocation among these metals easily and transparently, recognizing that each metal carries different risks and opportunities depending on prevailing economic conditions.

Although trading the actual ounce as gold is not directly available in the Saudi stock market (Tadawul), there are several channels and financial products that allow Saudi investors to gain exposure to the ounce price and its developments. One of the most prominent channels is exchange-traded funds (ETFs) that track the price of gold or silver, where investors can purchase units in these funds through the local or regional market, providing them with direct exposure to ounce price fluctuations without the need to own physical gold.

Additionally, some Saudi banks offer futures contracts or financial derivatives linked to the ounce price in global exchanges. These contracts allow investors to speculate on price movements or hedge against market volatility risks. Financial products such as gold sukuk issued by government or private entities are also available, which are debt instruments backed by gold reserves measured in ounces, providing investors with the opportunity to benefit from gold's stability as a core asset.

At the consumer level, purchasing actual gold from jewelry stores remains widespread in Saudi Arabia, where it is often sold by the gram or ounce. Some currency exchange and jewelry stores provide updated prices for the ounce in Saudi riyals, making it easier for individuals to track prices and make purchasing or selling decisions.

It is noteworthy that electronic trading of the ounce has expanded in recent years, with global trading platforms offering the ability to buy and sell gold and silver contracts directly linked to the ounce. Saudi investors benefit from these platforms to access high liquidity and competitive prices, but they must be mindful of the risks associated with trading in global markets and local regulatory and oversight requirements. Overall, these channels provide Saudi investors with diverse options to gain exposure to the ounce price, according to their investment goals and risk tolerance.

The precious metals sector, particularly gold, is a strategic sector in the Saudi economy, with local companies playing an increasingly important role in producing and supplying gold to local and international markets. The Saudi Arabian Mining Company (Ma'aden) stands out as the largest local player in this sector, leading gold extraction operations from Saudi mines and developing the local supply chain.

Ma'aden is expanding gold production annually, contributing to increased local supply and reducing reliance on imports. This expansion reflects on local gold prices, as discovering new mines or increasing production can stabilize or even lower prices at times, especially if accompanied by an increase in global supply. The Saudi government supports this sector through investment promotion policies and providing facilities for national and foreign companies.

In terms of competition, gold and the ounce do not only compete with precious metals; they also face competition from other assets such as real estate, stocks, oil, and cryptocurrencies. During periods of economic stability and rising returns from alternative assets, demand for gold may decrease, putting pressure on ounce prices. At the local level, currency exchange and jewelry stores emerge as competitors in distributing and selling gold at retail, competing to offer the best prices and services to customers.

Local mining companies face increasing challenges such as rising production costs, fluctuations in global prices, and environmental compliance requirements. However, ongoing government support and diverse sources of demand (investment, industrial, consumer) enhance the sector's ability to grow and adapt. The Saudi precious metals sector remains a vital component in supporting the national economy and enhancing the ounce's status as an investment and strategic tool in local and global markets.

In recent years, the Saudi financial market has seen an increasing trend toward developing financial products linked to the ounce, with gold sukuk leading the way. Gold sukuk are debt instruments backed by gold reserves measured in ounces, issued by government entities or financial institutions to provide an investment option compliant with Islamic law. These sukuk offer investors the opportunity to benefit from gold's stability as an asset and hedge against currency fluctuations and inflation.

Gold sukuk rely on the existence of actual gold reserves held by a trusted entity, often measured in troy ounces, and are periodically reviewed to ensure transparency and fairness in pricing. When these sukuk are issued, their price is determined based on the ounce price in global markets, and the value of the sukuk or its yield is paid to investors at maturity based on the prevailing gold price.

These products are an attractive option for investors who prefer Sharia-compliant investments or who wish to gain exposure to gold prices without the hassle of holding physical metal. Gold sukuk also provide higher liquidity compared to owning physical gold, as they can be traded in secondary markets. In addition to sukuk, some Saudi banks and financial institutions have begun offering derivative products or futures contracts linked to the ounce, providing investors with diverse options for hedging or speculation.

It is important to note that these products are subject to regulation by the relevant authorities in Saudi Arabia to ensure compliance with financial and Sharia standards. They are also directly affected by fluctuations in the global ounce price, making them a medium to high-risk investment option depending on market conditions. Ultimately, gold sukuk and financial products linked to the ounce represent an important development in the Saudi financial sector and an expansion of the tools available for investors seeking diversification and hedging.

The ounce plays a pivotal role in savings and hedging decisions for individuals and institutions in the Saudi market. With increasing economic volatility and changes in currency prices and monetary policies, many turn to gold measured in ounces as a means to preserve purchasing power and protect savings from erosion due to inflation. The ounce stands out here as a standardized measure that facilitates price comparison and tracking gold movements globally and locally.

From an individual perspective, gold serves as a safe haven during crises, where savings can be converted into gold ounces held in banks or homes. Jewelry stores and currency exchanges offer deals for buying and selling gold by the ounce, making it easier for Saudi families to save and hedge. Some prefer to buy gold when they anticipate rising inflation or a decline in currency value, benefiting from the ounce's flexibility in conversion and trading.

For institutions, the ounce is used in managing investment portfolios and diversifying assets. Some companies allocate part of their reserves in gold to hedge against market fluctuations or declining returns from other assets. Financial institutions benefit from products linked to the ounce, such as gold sukuk or futures contracts, to secure stable returns and reduce risks associated with market volatility.

Moreover, the ounce contributes to enhancing transparency and credibility in financial reporting, as both institutions and individuals can compare the value of their reserves or investments against global ounce prices. Additionally, the ounce facilitates mortgage and financing operations backed by gold, providing additional financing options in the Saudi market. Overall, the ounce represents an effective tool for savings and hedging, playing an increasingly important role in managing financial risks for individuals and institutions.

Despite the appeal of the ounce as a tool for hedging and investment, dealing with it involves a range of risks that must be understood when making financial decisions. The first of these risks is high price volatility, as ounce prices experienced sharp changes during 2024 and 2025, driven by factors such as global monetary policies, geopolitical tensions, and changes in supply and demand. For instance, rising global inflation in 2024 led to a rapid increase in ounce prices, followed by a sharp decline with changes in monetary policies in the second half of the year.

Ounce prices are also affected by factors outside the control of local investors, such as movements in the U.S. dollar, new gold discoveries, and decisions by major central banks. These factors can lead to unexpected losses for investors, especially those who prefer short-term speculation or hold concentrated investment portfolios in gold.

On the regulatory front, the Saudi market faces challenges in regulating electronic trading of gold and its derivative products. The Saudi financial system requires strict oversight of products linked to the ounce to ensure transparency and protect investor rights. Challenges may also arise regarding compliance with Sharia standards in the case of Islamic products such as gold sukuk.

It is worth noting that gold, despite its relative stability compared to some other assets, does not generate periodic returns like dividends or interest, making it a less attractive option during periods of rising interest rates or economic recovery. Additionally, there is a risk of loss or theft of physical gold when held outside financial institutions. For these reasons, it is always advisable to diversify and not rely solely on the ounce in investment portfolios, while considering consulting a licensed financial advisor to understand the risks and evaluate available options.

The gold and ounce trading sector in Saudi Arabia is witnessing a rapid digital transformation driven by advancements in financial technology and innovation in investment products. Investors can now track ounce prices in real-time through electronic trading platforms and execute buy and sell transactions quickly and accurately. These developments have enhanced transparency and facilitated access to global markets, increasing the efficiency of the local market and making it more attractive to individual and institutional investors.

One of the most notable aspects of digital innovation is the launch of trading platforms for futures and derivatives linked to the ounce, allowing investors to speculate or hedge against price fluctuations with unprecedented flexibility. Some Saudi banks and financial companies have begun developing smart applications that enable clients to track gold prices, complete buying and selling transactions, and even store gold physically in secure vaults while digitally documenting ownership.

Furthermore, Saudi regulatory authorities are striving to keep pace with these developments by updating legislative frameworks and providing a safe environment for innovation in financial products. The Capital Market Authority and the Saudi Central Bank play a crucial role in monitoring digital products and ensuring their compliance with local and international standards. New horizons are also opening up for innovative products such as digital sukuk backed by gold, allowing for trading ounce units through blockchain technologies.

For investors, these innovations have contributed to increased financial awareness and expanded the base of participants in the gold market. As financial technology continues to evolve, trading the ounce is expected to become easier and more flexible, enhancing gold's status as a strategic asset in the Saudi economy. However, attention must be paid to technology-related risks such as hacking or system failures, necessitating the adoption of advanced security solutions and educating investors on best practices for digital security.

Although the article does not include any direct price forecasts, it is possible to glimpse the future of the ounce in Saudi Arabia based on current trends in financial markets and economic developments. Gold, and specifically the ounce, is expected to remain at the forefront as a hedging and investment tool amid ongoing global economic fluctuations and growing concerns about inflation or geopolitical crises.

At the policy level, it is likely that the Saudi Central Bank will continue to enhance its gold reserves measured in ounces to support the local currency and achieve financial stability. Local mining companies, led by Ma'aden, will continue to expand their operations to increase gold production and meet local and international demand. On the other hand, the Saudi financial market will witness further innovation in products linked to the ounce, such as gold sukuk and digital contracts, providing investors with more options to diversify their portfolios.

However, the ounce sector in Saudi Arabia faces several challenges, the most prominent of which are global price volatility, competition from alternative assets (such as cryptocurrencies and real estate), and regulatory challenges related to digital gold products. Additionally, the evolution of financial technology necessitates updating legislation to ensure investor protection and enhance market transparency.

Overall, demand for the ounce as an investment standard and hedging tool in Saudi Arabia is expected to continue, driven by individual and institutional investors' desire to protect their savings from inflation risks and market fluctuations. However, success in this path requires keeping pace with global developments, enhancing digital infrastructure, and providing a supportive legislative environment for innovation and financial sustainability.