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Gold prices in Saudi Arabia dropped on Tuesday, with the cost per gram at 479.33 Saudi Riyals, compared to 479.94 SAR the previous day. The price per tola also reduced to SAR 5,591.11 from SAR 5,597.88.
Gold prices in Saudi Arabia are calculated by FXStreet, adapting international rates to local currency and measurement units. These prices are updated daily and might differ slightly from local rates.
Gold As A Safe Haven
Gold is used extensively as a store of value and a medium of exchange. It is regarded as a safe-haven asset during unstable times and serves as a hedge against inflation and currency depreciation.
Central banks frequently purchase gold to strengthen their economies and currencies, making them the largest holders of gold. In 2022, they added 1,136 tonnes to their reserves, worth around $70 billion.
Gold tends to rise when the US Dollar depreciates and when conservative markets rally. Conversely, a strong Dollar or a surge in risk assets can weaken gold prices. Geopolitical instability and interest rate changes also affect gold, which usually rises during lower interest seasons.
We’re seeing a minor dip in gold prices today, but this is less important than the broader financial environment. Gold typically moves opposite to the US Dollar and interest rates, so our focus must be on the Federal Reserve’s next move. These factors will dictate the direction for gold more than any single day’s trading.
Central Bank Demand
Recent commentary from the Federal Reserve suggests a growing willingness to pause interest rate hikes as economic growth slows. US 10-year Treasury yields have already reacted, dipping below 4.0% for the first time in several months, which makes holding a non-yielding asset like gold more attractive. For traders, this pivot signals that long positions in gold futures or buying call options could become profitable.
The US Dollar Index (DXY) has consequently weakened, recently falling below the 103 level. Since gold is priced in dollars, a weaker dollar provides a direct tailwind, making the metal cheaper for foreign buyers and boosting its price. This suggests that buying on any price weakness could be a sound strategy in the coming weeks.
We must also consider the steady demand from central banks, which provides a strong floor for the price. Looking back, they added a record 1,136 tonnes in 2022, and the latest World Gold Council data for Q3 2025 shows this de-dollarization trend is continuing with another 250 tonnes purchased. This persistent institutional buying should limit the downside risk for any short-term bearish bets.
Although US inflation has eased from its peaks, the latest reading of 3.1% for September 2025 shows it remains stubbornly above the Fed’s target. This keeps gold’s appeal as an inflation hedge firmly in play, especially with some choppiness returning to equity markets. Traders should therefore consider using options to hedge against any sudden geopolitical tensions or economic shocks that would send investors flocking to safe-haven assets.
