Gold prices in Saudi Arabia saw an increase on Wednesday according to FXStreet data. The price per gram of gold rose to 503.82 Saudi Riyals (SAR) from 499.46 SAR the previous day. Similarly, the price per tola increased from 5,825.57 SAR to 5,876.46 SAR.

Gold is priced according to international standards, with local prices adjusted for the USD/SAR exchange rate. Prices are updated daily but may vary locally. The precious metal is often viewed as a reliable asset during economic uncertainty and serves as a hedge against inflation.

Central Banks And Economic Strength

Central banks are major purchasers of gold, contributing to maintaining economic strength. In 2022, central banks bought 1,136 tonnes of gold valued at approximately $70 billion. This marked the highest annual purchase recorded, driven by countries like China, India, and Turkey increasing reserves.

Gold is inversely correlated with major assets such as the US Dollar and Treasuries. A declining Dollar often results in a rise in gold prices. Various factors, such as geopolitical instability and interest rate changes, affect gold prices. A weaker Dollar often leads to increased gold prices, while a stronger Dollar may suppress them.

The recent rise in gold, with prices now over 503 SAR per gram, indicates a growing underlying strength in the precious metal. This is not just a regional price tick but reflects a broader global sentiment that we must pay attention to. For derivative traders, this is a clear signal to re-evaluate short positions and watch for a potential trend continuation.

This upward pressure appears linked to last week’s US inflation data, which, as of October 2025, remains stubbornly above the Federal Reserve’s comfort zone at 3.6%. The Fed’s hesitant tone on future rate hikes has weakened the US dollar, making gold more attractive. A weaker dollar is often a primary catalyst for higher gold prices, a correlation we have seen play out repeatedly, most notably during the post-pandemic inflation spike of 2022-2023.

Safe Haven Demand And Geopolitical Issues

We are also seeing classic safe-haven demand return to the market due to heightened geopolitical friction in the South China Sea. Any increase in global instability tends to push capital toward gold, and the latest satellite imagery has clearly unsettled risk assets like equities. This flight to safety is confirmed by the 8% increase in open interest on gold futures contracts over the past two weeks.

Furthermore, the long-term trend of central bank buying continues to provide a solid price floor, preventing any significant dips. Following the record purchases in 2022, World Gold Council data for the first half of 2025 shows emerging market central banks added another 400 tonnes to their reserves. This consistent, price-insensitive buying limits downside risk for any bullish strategies we might consider.

The US Dollar Index (DXY) breaking below its 50-day moving average further supports a bullish outlook for gold. We’ve seen this pattern before, particularly in late 2024, when a similar break led to a sustained rally in precious metals. With equity markets showing signs of fatigue after a weak third-quarter earnings season, capital appears to be rotating out of riskier assets and into traditional stores of value.

Given these converging factors, we should be looking at strategies that profit from rising prices. Buying call options on major gold ETFs or futures contracts offers a defined-risk way to gain upside exposure. Implied volatility is still moderate, suggesting options are not yet excessively expensive, but this window may be closing soon.

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