Gold prices in Saudi Arabia fell on Thursday, according to FXStreet. The price per gram dropped to 493.26 Saudi Riyals (SAR) from 494.20 SAR on Wednesday. The price per tola also decreased, going from 5,764.20 SAR to 5,753.25 SAR. Gold’s pricing in Saudi Riyals is based on international rates, and prices update daily. However, they may differ slightly from local market rates.

Gold As A Protective Asset

Gold has always been seen as a way to preserve wealth and a means of exchange. People often turn to gold during market turbulence for protection. It serves as a safeguard against inflation and currency decline. Central banks are the biggest buyers of gold, purchasing 1,136 tonnes in 2022, worth about $70 billion. Countries like China, India, and Turkey are increasing their gold reserves. Gold prices typically rise when the US Dollar is weak, and they tend to move in the opposite direction of US Treasuries. Factors like geopolitical events and interest rates also affect gold prices, with lower interest rates making gold more appealing. The recent drop to SAR 493.26 per gram represents a minor dip. This should not be mistaken for a shift in the overall trend; small declines can actually provide good opportunities for new investments.

US Federal Reserve’s Next Move

Attention is turning to the US Federal Reserve, with expectations of a rate cut in the first quarter of 2026. Following a long period of high rates through 2024 and much of 2025, recent US inflation slowed to 2.8% in September. This is causing a shift towards lower rates, making gold, which doesn’t yield interest, more attractive. This sentiment is weakening the US Dollar, which inversely affects gold prices. The Dollar Index (DXY) has dropped nearly 2% in the last month, moving from over 105 to about 103.2 today. A weaker Dollar means gold costs less for those using other currencies, usually driving demand up. Central bank purchases continue to support gold prices, and we’ve seen this trend strengthen since the record amounts bought in 2022. According to the latest World Gold Council data, central banks have added another 850 tonnes to their reserves in 2025, primarily from emerging markets. This consistent institutional demand helps maintain a solid price floor. Additionally, recent economic indicators suggest a slowdown, making gold an appealing safe-haven asset. The latest US Non-Farm Payrolls report was weaker than expected, and manufacturing PMI has been below the 50-point mark for two months, indicating contraction. This uncertainty encourages diversifying away from riskier assets like stocks. Considering these factors, we should prepare for potential price increases in the coming months. Derivatives traders might look to buy call options that expire in March and April 2026 to take advantage of likely rate cuts. Another strategy could be selling out-of-the-money put spreads to benefit from the expected price stability and potential gains. Create your live VT Markets account and start trading now.

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