Gold Markets in Saudi Arabia: Comprehensive Analysis of Demand and Trends Until

Gold markets refer to the system of trading, buying, and selling gold in all its forms: bars, gold coins, jewelry, and even investment certificates linked to gold. In Saudi Arabia, gold is considered one of the traditional hedging assets, as individuals and companies turn to it during times of economic uncertainty or rising inflation. The importance of Saudi gold markets increases in light of the social and religious ties associated with gold, such as giving it as gifts on occasions or using it in dowries and weddings. Additionally, local monetary policies, such as the peg of the Riyal to the US dollar, directly affect the movement of gold prices in the local market, as any global change reflects on local prices after adding transportation costs, taxes, and commissions. According to the World Gold Council report, investment demand in Saudi Arabia increased by 9% in 2024, reaching 15.4 tons of bars and coins, reflecting the importance of gold in diversifying assets and financial stability. Thus, the significance of gold markets emerges as an economic and cultural pillar in the Kingdom.

Statistics from the World Gold Council for 2024 show that the Saudi market recorded the highest investment demand in the Gulf, with demand for gold bars and coins reaching 15.4 tons, a 9% increase from the previous year. Additionally, purchases of bars and coins in the last quarter rose by 20% to reach 4.3 tons. In contrast, demand for gold jewelry declined by 8% to 35 tons, due to rising prices and the impact on consumers' purchasing power. This trend is attributed to factors such as the rising global price of gold, which reached $3440 per ounce in April 2025, along with ongoing inflation and geopolitical concerns. This indicates a growing trend among investors towards gold as a safe haven, contrasted with declining consumption of jewelry for economic reasons. These data highlight the importance of monitoring market movements, as rising or falling demand reflects changes in buying and investment behaviors locally.

Gold prices in Saudi Arabia are influenced by several key factors related to both global and local markets. The most important of these factors is the global price of gold per ounce, which determines the local price after converting to Saudi Riyals pegged to the dollar. Inflation rates, US interest rates, geopolitical tensions, and the state of the US dollar also affect gold prices. When inflation rises or interest rates fall, investors tend to hedge by buying gold, leading to price increases. Additionally, local taxes (such as a 15% value-added tax on jewelry) and transportation costs and store commissions impose an additional impact on the final price for consumers. Finally, market movement depends on both investment and consumer demand, where investment momentum reflects in rising demand for bars and coins, while demand for jewelry is influenced by social and seasonal factors.

The Saudi gold markets have witnessed clear changes in demand patterns during 2024-2025. While investment demand for bars and coins increased by 9%, demand for gold jewelry decreased by 8%. This shift reflects an increased awareness among investors of gold's importance as a hedging asset against inflation and financial instability. Conversely, rising prices have led to a decline in jewelry purchases, especially with stagnant income and changing household spending priorities. It is noted that demand for jewelry tends to revive during certain seasons such as holidays and weddings, but this does not compensate for the overall annual decline. This divergence between investment and consumer demand shows that gold in the Saudi market operates between two main functions: financial hedging and social adornment, enhancing the market's flexibility and ability to adapt to changes.

The players in Saudi gold markets vary between mining companies such as Ma'aden (symbol: 1211), local and international jewelry stores like Damas and Pearl Jewelry, in addition to banks offering gold bar sales services. Ma'aden is the largest in terms of gold production locally through mining projects such as Mahd adh Dhahab and Jabal Sayid, although its activities also include other minerals. On the other hand, local jewelry stores and international brands dominate the retail side, competing on manufacturing quality and after-sales service. Currently, there are no exchange-traded funds (ETFs) for gold in the Saudi market, prompting investors to rely on purchasing physical gold or investing in global mining companies. These companies contribute to enhancing liquidity and facilitating access to the precious metal, providing diverse purchasing and investment options that meet the needs of investors and consumers.

Although the Saudi stock market does not include gold ETFs or futures contracts for gold, Saudi Arabian Mining Company (Ma'aden, symbol: 1211) is the most closely linked to the gold sector. Ma'aden represents a major production entity through its gold mining projects, but its financial results reflect the company's performance across all the minerals it produces, not just gold. Some local banks offer gold bar sales and investment certificates linked to gold but are not listed as independent stocks. Major jewelry companies, such as Damas and Pearl Jewelry, are not listed on the Saudi market. Thus, direct investment in gold or purchasing shares of international mining companies or Ma'aden remains the primary option for those wishing to gain financial exposure to gold within the local market.

Saudi Arabia is the largest gold investment market in the Gulf region, surpassing the UAE, which recorded purchases of 13.3 tons of bars and coins in 2024. The Saudi market also excels in investment demand compared to other Gulf countries, although the UAE (especially Dubai) is considered a regional hub for gold trade. Globally, China and India remain the largest consumers and producers of gold, but Saudi Arabia stands out as one of the largest importers and consumers in the Arab region. The Kingdom benefits from its ability to import gold in large quantities to meet local demand, while the Saudi gold market remains closely linked to fluctuations in global prices. This connection to international markets gives gold in the Kingdom a global investment character, with local advantages related to the culture and social role of the metal.

Gold is considered part of the official national reserves in Saudi Arabia, with the Saudi Central Bank (SAMA) holding approximately 323 tons of gold, placing the Kingdom among the top 20 countries in the world in terms of gold reserves. Gold represents an important asset to enhance confidence in the national financial system and is used as a hedge against monetary crises or declines in foreign currency values. Additionally, gold is used to diversify reserves alongside the dollar, euro, and a basket of other currencies. The central bank's policies emphasize the importance of gold as part of the national economic diversification strategy away from total reliance on oil, especially amid fluctuations in global energy prices.

Gold markets in Saudi Arabia are subject to several regulations aimed at protecting consumers and ensuring the safety of trading. Among the most prominent of these legislations is the imposition of a 15% value-added tax on gold jewelry, while pure investment bars are exempt from this tax in certain cases. Gold stores are required to adhere to transparency rules in displaying prices and weighing purity, and gold products undergo periodic inspections by regulatory authorities to ensure purity and quality. Additionally, regulatory bodies ensure that buying and selling operations comply with Islamic law, especially regarding immediate exchange and direct delivery transactions. Government efforts continue to develop the regulatory environment to increase trust in the market and facilitate buying and selling processes, whether traditional or electronic.

Due to the Saudi Riyal's peg to the US dollar at an almost fixed exchange rate (3.75 Riyals to the dollar), any fluctuation in the dollar's value directly reflects on local gold prices. If the dollar rises globally, the price of gold in dollars decreases, which may lead to a relative decline in the price of gold in Riyals. Conversely, if the dollar falls, gold prices rise in dollars and thus also in Riyals. This connection explains why gold prices in Saudi Arabia closely follow global market movements, with the addition of local costs such as taxes and commissions. Therefore, observers must monitor global exchange rates alongside gold prices to estimate local market movements more accurately.

The gold market in Saudi Arabia has seen significant development in buying and selling methods, especially with the emergence of electronic platforms that allow individuals to purchase gold by weight online. These digital options have increased accessibility to investment gold and provided consumers with a safe and transparent way to track prices and execute purchases without needing to visit traditional stores. Banks and some financial companies have also begun offering digital products that allow investors to hold gold in digital accounts or purchase gold-linked certificates. These innovations have enhanced market efficiency and expanded the customer base, while regulatory challenges related to ensuring transparency and consumer protection remain a top priority for regulatory authorities.

The gold markets in Saudi Arabia offer diverse opportunities for saving and investment, but they are not without risks. Key opportunities include leveraging gold as a safe haven during economic crises and the potential to diversify investment portfolios away from interest rate-linked assets. On the other hand, risks include fluctuations in global prices, the impact of local taxes and fees, and sudden changes in global or local demand. Gold prices may also be affected by US monetary policy decisions or changes in the dollar's value, necessitating close monitoring of macroeconomic indicators. It is important for investors to understand that investing in gold differs from other assets in terms of liquidity and speed of return, requiring careful consideration of financial goals and the selection of appropriate channels for buying or selling.

Forecasts indicate that gold will continue to hold significance in the Saudi market as a hedging tool, especially amid global economic tensions and increasing uncertainty. Investment demand is likely to remain superior to consumer demand in the medium term, with global gold prices continuing to rise. Digital innovations are also expected to continue driving market growth and expanding the investor base, while regulatory authorities work to develop the legal environment to ensure transparency and accessibility. The importance of gold within the Saudi central bank's reserves is also expected to increase as part of national economic diversification plans. Conversely, challenges related to price volatility and taxes will persist, necessitating careful study before making any financial decisions related to gold.