Gold prices in Saudi Arabia witnessed a further decline during trading on Tuesday, continuing a downward trend influenced by fluctuations in global markets. This drop comes at a time when investors and consumers alike are closely monitoring the direction of the precious metal, considered a safe haven during times of economic and political turmoil.
The price of a gram of 21-karat gold, the most popular and traded grade in the Kingdom's markets, has recorded a noticeable decline, further fueling anticipation in the local market. This change in local prices directly reflects gold's performance on global exchanges, which is influenced by several factors, most notably the strength of the US dollar and the interest rate policies pursued by the US Federal Reserve.
Today's gold prices in Saudi Arabia in detail
The gold prices for different carats in the Saudi market today, Tuesday, are as follows:
- The price of a gram of 24-karat gold reached 592 riyals, compared to 602 riyals at yesterday's close.
- The price of a gram of 22-karat gold has decreased to 542.75 riyals, compared to 551.75 riyals yesterday.
- The price of a gram of 21-karat gold: recorded 518 riyals, compared to 526.75 riyals in yesterday's trading.
- The price of a gram of 18-karat gold reached 444 riyals, compared to 451.5 riyals at yesterday's close.
- The price of a gram of 14-karat gold: It reached 345.5 riyals.
- The price of a gram of 12-karat gold has fallen to 296 riyals.
The price of an ounce of gold in Saudi Arabia today was recorded at 18416.75 riyals, while the price of a gold pound reached 4144.75 riyals.
The global context and its impact on gold prices
Historically, gold has been viewed as a hedge against inflation and economic uncertainty. However, its price has an inverse relationship with the US dollar; when the dollar rises, gold becomes more expensive for holders of other currencies, reducing demand and driving its price down. Recent strong US economic data and expectations of continued monetary tightening by the Federal Reserve to support the dollar are putting downward pressure on global gold prices.
Interest rate decisions have a direct impact, as raising interest rates increases the opportunity cost of holding gold, which does not generate returns, thus driving investors toward other interest-bearing assets such as government bonds. This global context is the primary driver behind the volatility witnessed in local markets, including the Saudi market.
The importance of the event and its impact on the Saudi market
Domestically, gold holds significant cultural and economic importance in Saudi Arabia. It is an integral part of social occasions such as weddings, and a primary investment and savings tool for many families. Therefore, the current price drop may present an opportunity for consumers looking to purchase gold jewelry and gifts at a lower cost.
For investors, this decline may encourage them to increase their holdings of the precious metal in anticipation of potential future price increases, especially given the ongoing geopolitical tensions in various parts of the world, which could restore gold's appeal as a safe haven at any moment. Since the Saudi riyal is pegged to the US dollar, any change in the global price of gold is immediately and directly reflected in riyal prices, making the Saudi market highly sensitive to global trends.
