Gold prices in Saudi Arabia have risen to 514.37 Saudi Riyals (SAR) per gram, up from 512.69 SAR on Friday, according to FXStreet data. The price per tola has also increased to SAR 5,999.42, from SAR 5,979.96. FXStreet updates these prices every day, considering international market rates and currency fluctuations. Gold is valued for its reliability as a store of value and is seen as a safe-haven asset during uncertain economic times.

Central Bank Reserves

Central banks hold significant amounts of gold, adding 1,136 tonnes valued at about $70 billion in 2022. This was their largest yearly purchase ever, with countries like China and India rapidly increasing their gold reserves. Gold prices generally rise when the US Dollar weakens, as there is an inverse relationship between the two. When the stock market declines, gold tends to gain value. Additionally, geopolitical instability often drives up gold prices due to its appeal as a safe investment. Several factors affect gold prices, including interest rates and the strength of the currency. Gold typically increases when interest rates are low and becomes more appealing when the Dollar decreases in value. FXStreet warns that these market evaluations come with risks and uncertainties. With gold prices slightly rising on October 20, 2025, we are witnessing signs of strength. This uptick seems related to a small dip in the US Dollar, ahead of key inflation data expected later this week. Derivative traders should be aware of this classic inverse relationship currently at play.

Market Dynamics and Strategies

The recent indications from the Federal Reserve about a possible pause in interest rate hikes have created uncertainty in the market, which usually benefits non-yielding assets like gold. According to the latest Commitments of Traders report, large speculators are increasing their net-long positions in gold futures. This suggests they expect higher prices, especially if the Fed adopts a more dovish approach in its November meeting. Growing trade tensions between the US and China are also creating global market unrest, leading capital to safer investments. This situation has raised gold’s implied volatility to its highest level in three months, making strategies like straddles more attractive for those anticipating significant price movements. Similar spikes in volatility occurred during the trade disputes of the late 2010s, often preceding sharp increases in gold prices. We should also consider the ongoing demand from central banks, which offers a solid foundation for gold prices. The World Gold Council’s recent data for the third quarter of 2025 shows that central banks added over 215 tonnes to their reserves. This trend continues from the record purchases in 2022, absorbing market supply and supporting a positive long-term outlook. Given the mix of geopolitical risks and potential shifts in monetary policy, it’s wise to establish bullish positions with controlled risk. Consider buying call options or implementing bull call spreads on December gold futures to take advantage of potential price increases as the year concludes. This approach allows traders to benefit from price rallies while minimizing costs and overall risk exposure. Create your live VT Markets account and start trading now.

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