Gold prices in Saudi Arabia went up on Wednesday, according to FXStreet data. The price per gram of gold rose to 503.82 Saudi Riyals (SAR) from 499.46 SAR the day before. The price per tola also increased from 5,825.57 SAR to 5,876.46 SAR. Gold is priced based on international standards, with local prices adjusted for the USD/SAR exchange rate. Prices change daily but can vary locally. Gold is often seen as a safe investment during tough economic times and protects against inflation.

Central Banks and Economic Strength

Central banks play a big role in buying gold, which helps maintain economic stability. In 2022, they purchased 1,136 tonnes of gold worth around $70 billion. This was the highest annual purchase ever, driven by countries like China, India, and Turkey, which expanded their reserves. Gold typically moves in the opposite direction of major assets like the US Dollar and Treasuries. When the Dollar decreases, gold prices generally rise. Various factors, including geopolitical tensions and interest rate changes, influence gold prices. A declining Dollar usually boosts gold prices, while a stronger Dollar can lower them. The recent increase in gold prices, now over 503 SAR per gram, shows a growing strength in this precious metal. This trend is not just a local change; it reflects a wider global sentiment. For derivative traders, this is a strong signal to rethink short positions and watch for a potential trend to continue. This upward pressure seems related to last week’s US inflation data, which remains above the Federal Reserve’s comfort zone at 3.6% as of October 2025. The Fed’s cautious stance on future rate hikes has weakened the US dollar, making gold more appealing. A weaker dollar often drives gold prices higher, a trend we saw during the inflation surge after the pandemic in 2022-2023.

Safe Haven Demand and Geopolitical Tensions

We are also seeing increased demand for gold as a safe haven due to rising geopolitical tensions in the South China Sea. Greater global instability typically pushes investments toward gold, and recent satellite images have unsettled riskier assets like stocks. This shift to safety is supported by an 8% rise in open interest on gold futures contracts over the last two weeks. Moreover, the ongoing trend of central bank buying helps keep gold prices steady, preventing significant drops. Following record purchases in 2022, World Gold Council data from the first half of 2025 shows that emerging market central banks added another 400 tonnes to their reserves. This steady, price-insensitive buying limits risks for any bullish strategies we might pursue. The US Dollar Index (DXY) dropping below its 50-day moving average further backs a positive outlook for gold. We’ve seen this pattern before; in late 2024, a similar break led to a sustained rally in precious metals. With stock markets showing signs of fatigue after a weak earnings season in the third quarter, investments appear to be shifting from riskier assets to traditional safe havens. Given these factors, we should consider strategies to benefit from rising prices. Buying call options on major gold ETFs or futures contracts provides a low-risk way to gain exposure. Implied volatility remains moderate, indicating that options are not excessively priced, though this opportunity may not last long. Create your live VT Markets account and start trading now.

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