Gold prices in Saudi Arabia rose on Friday, according to FXStreet. The price per gram increased to 527.16 Saudi Riyals (SAR) from 520.68 SAR on Thursday. The price per tola also went up to 6,148.66 SAR, compared to the previous day’s 6,073.08 SAR. FXStreet calculates local gold prices by adjusting international prices to fit local currencies and measurements.

Gold as a Safe Asset

Gold is often seen as a safe investment, especially during tough economic times. It helps protect against inflation and currency depreciation since it does not depend on any single issuer. Central banks hold the most gold, using it to strengthen economic stability. In 2022, they added 1,136 tonnes of gold worth $70 billion, marking a record increase, according to the World Gold Council. Several factors affect gold prices, including geopolitical unrest and fears of recession. Gold typically rises when interest rates fall and tends to move opposite to the US Dollar and US Treasuries, both viewed as safe investments. Currently, gold is gaining strength, building on its performance from late last year. This trend is largely due to market expectations that the US Federal Reserve may start lowering interest rates in the coming months. As a non-yielding asset, gold becomes more appealing when interest rates are expected to decrease.

Demand from Central Banks

This forecast pressures the US Dollar, which usually has an inverse relationship with gold. The US Dollar Index (DXY) dropped over 3% in the last quarter of 2025, as traders anticipated this policy change. A weaker dollar makes gold cheaper for people using other currencies, which can boost demand. Additionally, strong demand from central banks has helped keep gold prices stable. Their record purchases in 2022 were followed by another 800 tonnes bought in 2024, according to World Gold Council data. Early indicators suggest this trend continued through the end of 2025, especially from banks in emerging markets. Given gold’s status as a safe haven, any economic uncertainty will likely support its price. Global manufacturing PMI data remained below the growth mark of 50 for much of the second half of 2025, raising concerns about a slowdown. This makes holding assets like gold a smart way to diversify an investment portfolio. For derivative traders, this environment hints at a positive outlook in the coming weeks. We suggest buying call options with strike prices slightly above the current market level to enjoy a favorable risk-to-reward profile. This strategy allows participation in potential price increases while limiting losses to the premium paid. Create your live VT Markets account and start trading now.

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