Gold prices in Saudi Arabia have gone up, according to FXStreet. On Monday, the price for one gram was 507.83 Saudi Riyals, an increase from 507.10 SAR on Friday. The cost for one tola also rose to 5,923.48 SAR, compared to 5,914.72 SAR the previous Friday. FXStreet reports a range of Gold prices: 1 gram is 507.83 SAR, 10 grams cost 5,078.51 SAR, and a troy ounce is valued at 15,795.31 SAR. These prices reflect international rates converted to the local currency and are updated daily. They mainly serve as a reference, as local markets may show slight variations.

Safe Haven Amid Market Volatility

Gold is valued as a safe place to store wealth and is a popular choice for trading, especially during market fluctuations. In 2022, central banks bought 1,136 tonnes of gold worth about $70 billion, according to the World Gold Council. This was the largest purchase in history, with emerging economies boosting their holdings. Gold prices usually move opposite to the US Dollar and US Treasuries. Geopolitical issues and interest rates also play a role, with lower rates typically leading to higher gold prices. Gold’s value is primarily influenced by its price in USD. Gold prices have shown a slight increase today, December 8th, signaling potential market tension. This small rise reflects broader sentiment, rather than just local Saudi trading. Traders should consider this a sign of positioning ahead of anticipated volatility in the US dollar. We see the market factoring in a softer approach from the Federal Reserve, which is good for gold. The shift away from aggressive rate hikes started in late 2023, setting a long-term trend. With recent US inflation rates just above 2.5%, the pressure to keep rates high is lessening, making gold, a non-yielding asset, more appealing.

Impact of the US Dollar on Gold

The relationship between gold and the US Dollar is important, and we see the dollar as weak. The US Dollar Index (DXY) has struggled to stay above 103, a significant decrease from previous highs. A weaker dollar means gold becomes cheaper for buyers using other currencies, which could increase demand in the coming weeks. We should also consider the steady demand from central banks, which helps support gold prices. After record purchases in 2022 and ongoing strong buying in 2023 and 2024, institutional demand has absorbed much of the available supply. This ongoing buying by significant global players strengthens the price against sharp declines. With the recent strength in stock markets, gold acts as an important hedge. As stock indices reach new highs, some investors may shift a portion of their gains into safe-haven assets. This strategy could further boost gold prices if market sentiment towards riskier investments changes. Create your live VT Markets account and start trading now.

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