On Wednesday, gold prices in Saudi Arabia dropped, as reported by FXStreet. The price per gram fell to 507.58 Saudi Riyals (SAR), down from 508.19 SAR the day before. Similarly, the price per tola decreased to 5,920.27 SAR, down from 5,927.44 SAR. FXStreet calculates gold prices by converting global prices (USD/SAR) to the local currency. They update prices daily, but minor differences may occur in local markets. Gold is historically valuable because it acts as a store of value. Central banks hold significant amounts, adding 1,136 tonnes of gold worth about $70 billion to their reserves in 2022. This is the largest annual purchase on record, with countries like China, India, and Turkey rapidly increasing their reserves for economic stability and currency support. Gold prices move opposite to the US Dollar and US Treasuries since both are considered safe assets. Gold does not yield interest, so its price goes up when interest rates fall and the USD weakens. Geopolitical issues can also cause gold prices to rise quickly, as many turn to it for safety. Currently, gold prices are stabilizing just below recent highs. This is typical as traders wait for a big economic event. Today, December 10th, everyone is focused on the Federal Reserve’s interest rate decision and future guidance, which will likely influence gold prices for the rest of the year. The market has nearly priced in a 25 basis point rate cut due to a mild global slowdown in 2025 and recent US inflation data. The Consumer Price Index for November was 2.8%, still above the Fed’s target but showing improvement. Lower interest rates usually boost gold since they reduce the opportunity cost of holding a non-yielding asset. This expectation has weakened the US Dollar, which moves opposite to gold. The US Dollar Index (DXY) has decreased from about 105 to 102.5 in the past month as traders anticipated this change. A dovish statement from the Fed chairman could push the dollar down further, benefiting gold prices. Looking beyond the Fed’s announcement, the support for gold remains strong. Central banks keep buying, with data from the World Gold Council showing that they added over 250 tonnes to their reserves in the third quarter of 2025. This consistent trend offers a solid foundation for the market. There is also notable strength across all precious metals. Silver recently surged past $60, reaching a new record high, which shows strong bullish sentiment. This momentum in a related asset typically helps support gold. For derivative traders, this means high implied volatility is likely around the announcement. A dovish statement could trigger a rapid price increase, making long call options an attractive strategy. On the other hand, if the Fed surprises with a hawkish tone, prices could fall, creating opportunities for those holding put options. Finally, we should keep in mind the ongoing low-level geopolitical tensions affecting the global stage. This situation consistently increases the safe-haven demand for gold. Any unexpected rise in global conflicts could serve as a powerful catalyst for a price increase.

here to set up a live account on VT Markets now