Gold prices in Saudi Arabia rose on Monday, according to FXStreet. The price per gram jumped to 563.03 Saudi Riyals (SAR), up from 552.38 SAR on Friday. The price per tola also increased to SAR 6,566.88, compared to SAR 6,442.79 before. FXStreet calculates these prices by converting international gold rates (USD/SAR) into local currency and units, updating them daily based on local market conditions. Actual local rates may vary slightly from these reference prices.

The Importance of Gold as an Investment

Gold is seen as a reliable investment. Many view it as a safe choice during uncertain times and as protection against inflation. Because it isn’t tied to any issuer or government, it’s considered a secure asset. Central banks are the biggest gold buyers. In 2022, they added 1,136 tonnes worth about $70 billion. Countries like China, India, and Turkey are quickly increasing their reserves. Gold prices usually move in the opposite direction of the US Dollar and US Treasuries. Economic instability or fears of a recession often boost gold prices due to its status as a safe haven, while a strong Dollar typically keeps prices in check. The recent rise in gold prices, reflected locally, signals a shift in the global economic landscape. This change suggests that investors are beginning to favor safe-haven assets. This isn’t just a brief spike; it’s part of a larger trend that began in late 2025.

Effects of Changing Monetary Policies

Expectations for central bank policies are shifting, especially regarding the US Federal Reserve. After extended inflation throughout much of 2024 and the resultant economic slowdown in 2025, the market expects monetary easing. Recent data shows that inflation, indicated by the US Consumer Price Index for December 2025, has dropped to 2.5%, a manageable level. This directly influences the U.S. Dollar, which typically moves opposite to gold. The Dollar Index (DXY) has fallen below the crucial 102 mark, a stark change from its strength in early 2025. With Fed funds futures indicating at least two interest rate cuts by the end of 2026, the Dollar’s outlook appears negative, benefiting gold. Central banks continue to show consistent demand for gold. In fact, they added over 800 tonnes to their reserves in 2025, based on reports from the World Gold Council. This ongoing institutional buying helps establish a price floor and reflects a long-term trust in gold as a primary reserve asset. For derivative traders, this situation suggests it’s time to explore strategies that take advantage of upward momentum and potential volatility increases. Buying long-dated call options on gold ETFs or futures, such as those for June and September 2026, could be a smart move to capture upside while managing risk. The implied volatility remains relatively low compared to where it could rise if rate cuts happen. Given the likelihood of sharp market reactions to central bank announcements, consider using call spreads to lower the initial investment cost. Selling a higher-strike call against a purchased call can finance the position and enhance the risk-reward profile. This strategy allows for a bullish outlook while protecting against a sideways market or a moderate pullback. Create your live VT Markets account and start trading now.

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