Factors Influencing Gold Prices in KSA

Gold prices in Saudi Arabia are not determined in isolation. They are heavily influenced by the global spot price of gold, which is denominated in US dollars. Since the Saudi Riyal is pegged to the US Dollar, any fluctuation in the dollar's value has a direct impact on gold prices locally.

Another major factor is the oil market. Historically, there has been a positive correlation between oil prices and gold prices. When oil revenues are high, liquidity in the Kingdom increases, often leading to higher demand for luxury goods, including gold.

Seasonal demand also plays a crucial role. During wedding seasons, Ramadan, and Hajj, the demand for physical gold jewelry spikes, often keeping local premiums higher than the global average.