Global Gold Price: Influencing Factors and Impacts on Saudi Market

The global gold price is the value at which gold is traded in international financial markets, typically measured in US dollars per troy ounce. This price is determined in major gold trading markets, most notably the London Bullion Market Association (LBMA) and the New York Commodity Exchange (COMEX), where it is established through real-time supply and demand mechanisms. There are two main types of prices: the spot price, which is the current price for immediate delivery, and the futures price, which reflects market expectations for price movements in the near future. The global gold price is influenced by a variety of factors, including the size of official reserves held by central banks, changes in mine production, geopolitical developments, and global monetary policies. The official gold price is announced twice daily during a session known as the 'gold fixing' in London, serving as a reference for traders worldwide. The importance of this price lies in its status as a global benchmark for pricing raw gold and jewelry in all local markets, including Saudi Arabia.

Numerous factors control the global gold price, including macroeconomic indicators and monetary policies, notably:
- US Interest Rates: When central banks, particularly the US Federal Reserve, lower interest rates, gold becomes more attractive as it does not yield a fixed return like bonds, increasing demand for it.
- Inflation: Gold is considered a safe haven against inflation, preserving purchasing power when the value of paper currencies declines.
- Strength of the US Dollar: There is a traditional inverse relationship between gold and the dollar; a weaker dollar leads to higher gold prices and vice versa.
- Geopolitical Tensions: International crises, wars, or significant economic risks often drive investors towards gold.
- Supply and Demand: Mine production, gold recycling, and the level of industrial and investment demand affect the price.
These factors interact in a complex manner, and a change in one can lead to significant movements in global prices.

Global gold prices have experienced exceptional movements in recent years. Between 2019 and 2023, prices ranged from $1,400 to $2,000 per ounce, with strong spikes during the COVID-19 pandemic and rising inflation. In 2024, gold reached record levels, hitting approximately $2,623.82 per ounce in December 2024, driven by increased demand for safe havens amid ongoing economic crises and expectations of eased monetary policies. At the beginning of 2025, the upward trend continued, with gold reaching unprecedented levels of $3,900 per ounce in October 2025, fueled by political crises in Washington and expectations of US interest rate cuts. This exceptional performance reflects profound changes in the global economy and directly impacts local markets and gold prices in Saudi Arabia.

The local gold market in Saudi Arabia is closely linked to the global gold price, as gold in local shops is priced based on the global price per ounce, with added manufacturing costs, taxes, and profit margins. Any increase in the global price is immediately reflected in the prices of various carats (24, 21, 18) per gram of gold in the Kingdom. By the end of 2025, the price of 24-carat gold per gram in Saudi Arabia was recorded at around 226–230 riyals, compared to approximately 195–200 riyals at the end of 2023, driven by a surge in global prices. This close correlation means that Saudi investors or those wishing to purchase gold for savings or adornment are directly affected by global market movements. Additionally, global gold prices impact the performance of listed mining companies in the Saudi financial market, particularly Ma'aden, whose profits vary according to precious metal prices.

The Saudi Mining Company (Ma'aden) symbol 1211 is the leading and only company listed on Tadawul specializing in gold and other minerals extraction. Ma'aden was established as part of the Kingdom's strategy to diversify income sources and reduce reliance on oil. The company produces gold alongside phosphate, aluminum, and industrial minerals, managing major mines including the Ad Duwayhi and Mahd Adh Dhahab mines. Ma'aden has significantly benefited from the rise in global gold prices, reflected in its revenues and net profits, contributing to an increase in its market share value. The company also operates within the National Industrial Development and Logistics Program (NIDLP) to double the mining sector's contribution to GDP and develop expansion projects such as the third gold mine, which raised the company's production capacity in 2024–2025.

Ma'aden's financial performance during 2023–2025 showed remarkable growth driven by rising gold, fertilizer, and phosphate prices. In the third and fourth quarters of 2024, Ma'aden announced record historical profits, with revenues and net profits increasing by over 50–100% annually in some quarters. By the end of 2024, Ma'aden's share price reached approximately 62 riyals, with a market value of around 200 billion riyals. The price-to-earnings (P/E) ratio ranged between 8–12, while the cash distribution yield fluctuated between 3–5% during recovery years. These indicators reflect how the company's profitability is affected by movements in the global gold price, as rising prices lead to increased profit margins and stimulate expansion projects in mining.

The mining and gold sector is an essential part of the basic materials sector and is gaining increasing importance within the Vision 2030 framework to diversify the Saudi economy. The sector includes exploration and mining activities for precious metals, phosphate, aluminum, and industrial minerals, contributing to job creation and the development of new areas. The Saudi government supports this sector through significant investments and funding for new extraction projects and enhancing production efficiency. Rising global gold prices enhance the viability of investments in the Saudi mining sector, providing additional incentives for companies like Ma'aden to expand their activities and increase production of precious metals. The sector also contributes to attracting foreign investments and enhancing the Kingdom's position as a regional center for mineral trade.

In the Saudi stock market, Ma'aden (1211) is the main player in gold production, with no direct competitors in gold mining within the market. While there are companies specialized in jewelry manufacturing and gold products, they are not listed on the financial market. Regionally, there are competing mining companies in the Gulf and North Africa, but their activities do not directly reflect in Tadawul. Ma'aden remains the company that reflects fluctuations in the global gold price in its financial results, making its stock a reference for investors wishing to gain exposure to the gold sector through the local market.

The local gold price in Saudi Arabia is a direct reflection of global movements, as local shops price gold based on the average global price per ounce, adding manufacturing costs and taxes. Therefore, any increase or decrease in the global gold price leads to immediate changes in the prices of gold grams of various carats. For instance, when the gold price exceeded $3,900 per ounce in 2025, the price of 24-carat gold per gram in Saudi Arabia rose to over 230 riyals. Additionally, the exchange rate of the dollar against the riyal (officially pegged), value-added tax, and profit margins for traders also play a role. Thus, it is important for local consumers or investors to monitor global developments, along with local official announcements of gold prices.

In recent years, a series of events have directly impacted the global and local gold prices. Among the most notable are rising political tensions, slowing growth in major economies like China, and changes in US Federal Reserve policies. The Saudi government has launched several initiatives to stimulate the mining sector, including injecting new investments and expanding the production capacity of gold mines. Ma'aden has also announced cooperation agreements with global companies and new drilling projects. In international markets, news about the US government shutdown and expectations of interest rate cuts have boosted demand for gold. Financial news agencies like Reuters track developments daily, providing accurate references for local and global investors.

There are several reliable ways to track global gold prices:
1. Global news agencies like Reuters and Bloomberg that provide real-time updates on gold prices (Spot Gold).
2. Electronic trading platforms that display prices for spot and futures gold contracts (XAU/USD).
3. Specialized economic websites like Metals24 and Gold Price.
4. Local ministries and authorities such as the Saudi Ministry of Commerce that daily display gold prices per gram for various carats.
5. Local banks and exchanges that publish buying and selling prices for gold bars and coins.
It is recommended for those wishing to monitor prices to rely on official sources and continuously update data, considering time differences between global and local markets.

Gold has long been considered a safe store of value, especially during times of economic uncertainty or high inflation. Gold retains its value over the long term and is not subject to monetary erosion like paper currencies. Additionally, gold is used as a hedge against fluctuations in currency prices and declining yields from other assets like stocks and bonds. In recent years, interest from individual and institutional investors in gold has increased due to rising geopolitical risks and a shift in monetary policies towards easing. In Saudi Arabia, gold holds a special status among traditional family savings, in addition to being part of the official reserves of the Saudi central bank.

Investors in Saudi Arabia can gain exposure to changes in global gold prices in several ways:
- Indirect investment by purchasing shares of Ma'aden listed on the Saudi financial market, as its financial results reflect gold and other metal prices.
- Purchasing physical gold (bars, coins, or jewelry) from authorized shops or local banks.
- Trading on global platforms in gold contracts or exchange-traded funds (ETFs), while considering local laws and regulations. Currently, there are no direct gold contracts or ETFs available on Tadawul, but legislative developments may allow for this in the future. It is important to note that investing in gold carries risks like any other asset, and it is advisable to consult a licensed financial advisor before making any decisions.

Gold is part of the Kingdom's strategy to develop the mining sector within Vision 2030. The government aims to increase the mining sector's contribution to GDP, attract foreign investments, and create new jobs. The Ministry of Industry and Mineral Resources has launched programs to develop new mines, offering tax incentives and exemptions for investors in the sector, along with enhancing partnerships with global mining companies. Rising global gold prices provide a conducive environment for expanding investments in the sector, and enhance the viability of projects such as the third gold mine announced by Ma'aden in recent years. The gold sector is expected to continue playing a pivotal role in achieving the Kingdom's economic diversification goals.