Gold prices in Saudi Arabia experienced a rise on Friday, as reported by FXStreet. The price per gram increased to 527.16 Saudi Riyals (SAR) from 520.68 SAR on Thursday.
The price per tola went up to 6,148.66 SAR, compared to the previous day’s 6,073.08 SAR. FXStreet calculates Gold prices in the region by adapting international prices to local currencies and units.
Gold as a Safe Asset
Gold is traditionally considered a safe asset, especially during economic uncertainty. It serves as a hedge against inflation and depreciating currencies, not relying on any specific issuer.
Central banks are the largest holders of Gold, using it to reinforce economic stability. In 2022, central banks added 1,136 tonnes of Gold, valued at $70 billion, a record annual increase according to the World Gold Council.
Gold’s price is influenced by several factors, including geopolitical instability and recession fears. It often moves inversely to the US Dollar and US Treasuries, both considered safe assets. Lower interest rates typically drive Gold prices up, while a strong US Dollar tends to keep them in check.
Gold is showing strength, building on its performance from the end of last year. We see this as being driven by growing market expectations that the US Federal Reserve will begin cutting interest rates within the next quarter. As a non-yielding asset, gold becomes more attractive when interest rates are poised to fall.
Demand from Central Banks
This outlook is weighing on the US Dollar, which has an inverse relationship with gold. The US Dollar Index (DXY) actually fell over 3% in the final quarter of 2025 as traders anticipated this policy shift. A weaker dollar makes gold cheaper for holders of other currencies, which can increase demand.
We also cannot ignore the persistent demand from central banks, which has provided a solid floor for prices. Looking back, their record purchases in 2022 were followed by another strong 800 tonnes of net buying in 2024, according to World Gold Council data. Early reports suggest this trend continued through the end of 2025, especially from emerging market banks.
Given the safe-haven status of gold, any underlying economic uncertainty will be supportive for its price. We have noted that global manufacturing PMI data remained below the expansionary level of 50 for most of the second half of 2025, fueling concerns about a growth slowdown. This makes holding assets like gold a prudent strategy for portfolio diversification.
For derivative traders, this environment suggests a bullish bias in the coming weeks. We believe purchasing call options with strike prices moderately above the current market level could offer a favorable risk-to-reward profile. This allows participation in potential upward moves while defining the maximum potential loss to the premium paid.
