**Gold as a Safe-Haven Asset** Central banks, especially in emerging economies like China, India, and Turkey, hold a significant amount of gold. In 2022, they bought 1,136 tonnes, the most ever, worth about $70 billion. Gold’s price often moves in the opposite direction of the US Dollar and US Treasuries. When the Dollar weakens, gold prices usually rise. Global instability can also make gold more valuable because of its safe-haven reputation. Additionally, lower interest rates generally support higher gold prices. **Rising Gold Prices in Saudi Arabia** Gold prices are increasing and are now at SAR 526.08 per gram as we end the year. This rise is happening amid slowing global growth and ongoing geopolitical uncertainty across 2025. For traders dealing in derivatives, this price movement indicates a stronger interest in safe-haven assets as we enter the new year. The market is now predicting possible interest rate cuts from the U.S. Federal Reserve in mid-2026, marking a big change from the rate hikes we saw until the end of 2024. Since gold doesn’t earn interest, it becomes more appealing when rates are low. This situation encourages traders to look at long call options or bull call spreads on gold futures for the next few quarters. This perspective is supported by the U.S. Dollar Index, which has been staying below the 101 mark for the last month. With U.S. inflation data from November 2025 showing a steady 2.8%, gold’s role as a hedge against both a weak Dollar and inflation is becoming clearer. Any further weakness in the Dollar could boost gold even more. It’s also important to highlight the strong demand from central banks, which has continued since their record purchases in 2022. The World Gold Council reports that central banks added over 950 tonnes to their reserves in the first three quarters of 2025. This ongoing demand provides a solid support level, reducing downside risk for those with long positions. As we face economic uncertainties, we can expect higher volatility in the coming weeks. This environment may benefit traders using strategies like long straddles, which can profit from significant price changes in either direction. We will closely monitor implied volatility on gold options during the first quarter of 2026 to identify the best entry points. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now