Comprehensive Guide: When Does Gold Price Drop in Saudi Arabia and Smart Investment Opportunities

Gold in Saudi Arabia is not just a precious metal or jewelry; it is a deep-rooted economic and social phenomenon. With every religious celebration and occasion, and each new investment season, gold remains a symbol of stability and value. So, when does the price of gold in Saudi Arabia decrease, and what are the ideal moments to make a wise investment decision?

Answering this question requires a deep understanding of local market mechanisms and their interactions with global economic changes. In this comprehensive guide, we will explore influencing factors, observable indicators, and practical strategies that enable investors to make informed decisions to maximize benefits from price movements.

Economic Factors Controlling Local Gold Price Declines

The price of gold in the Saudi market moves according to a complex equation combining global influences and local realities. Internationally, the strength of the US dollar plays a pivotal role — as the DXY index rises above 104 points, global demand for gold decreases, quickly reflecting on local prices, especially since the Saudi riyal is pegged to the dollar.

Additionally, global interest rates directly impact gold prices. When the US Federal Reserve raises interest rates, investors tend to shift toward income-generating assets like bonds and deposits, leaving non-yielding assets like gold. This shift reduces investment demand, exerting downward pressure on prices.

Locally, Saudi Arabia is experiencing significant expansion in the mining sector as part of Vision 2030. Local gold production increased by 22% in 2024 alone, with government investments aiming to reach about 52 tons annually by 2030. An increased local supply — if not matched by a proportional rise in demand — creates downward price pressures.

Seasonal Demand Cycle: When Do Prices Actually Drop?

The Saudi market exhibits a clear pattern in gold demand. At the start of the year, demand is relatively limited after the holiday and celebration seasons. Gold prices per gram of 21K typically range between 360 and 380 SAR in the first quarter.

As summer and the second half of the year approach, investment and consumer demand gradually increase, especially with upcoming wedding seasons and religious events. By the fourth quarter (October-December), prices peak at 440-455 SAR before declining again in the new year.

Golden opportunities to buy at better prices appear during several periods:

After major events: When Ramadan and holidays end, demand saturates, followed by a relatively quiet period offering good buying opportunities.

At the start of the school season: Families shift priorities toward essential expenses, reducing spending on luxury goods including gold.

Before major shopping seasons: Some consumers delay purchases awaiting specific occasions, causing temporary market slowdown.

Economic Indicators: How to Anticipate Price Drops

Choosing the optimal time to buy isn’t just about waiting for prices to fall but also about monitoring specific indicators that signal an upcoming decline. Three key indicators deserve attention:

First: US Dollar Index (DXY) — When it exceeds 104 points, gold typically faces price pressure. This level indicates dollar strength, reducing gold’s appeal globally, which directly impacts the Saudi market.

Second: US long-term bond yields — If 10-year US Treasury yields rise above 4%, investors prefer bonds with guaranteed income over gold, leading to price declines.

Third: Strong US economic data — Positive reports on unemployment or economic growth reduce demand for gold as a safe haven, prompting investors to move toward higher-risk assets.

Historical Perspective: How Has the Saudi Gold Market Evolved?

The path of gold in Saudi Arabia has not been isolated from global economic shifts. Since the 1970s, when gold prices began floating internationally, the market has gone through multiple phases.

In the 70s and 80s, the price of 21K gold per gram ranged between 16 and 18 SAR, serving as both a savings tool and traditional jewelry. During the 90s, amid stock market booms, prices stabilized around 40-45 SAR.

With the new millennium and especially after the 2008 financial crisis, gold saw renewed investment interest, rising from 55 to 65 SAR. The last decade (2010 onward) experienced sharp fluctuations with increased market development and growing investment awareness, with prices fluctuating between 140 and 180 SAR.

Recent years (2023-2024) saw a significant rise to 270-300 SAR, stabilizing around 440-455 SAR by the end of 2025, driven by high global inflation (around 3% in the US and 4% in major economies) and easing monetary policies.

Smart Investment Strategy: When and How to Buy?

Investment tools in gold are diverse, allowing each investor to choose what suits their goals:

Physical gold (bullion, coins, jewelry): Suitable for long-term savings, offering full control and good liquidity, but requires storage and insurance costs.

ETFs (Exchange-Traded Funds): Provide easy trading via stock exchanges without owning the physical metal, with diversified investment.

Mining company stocks: Offer exposure to production growth and profitability rather than the metal itself.

CFDs (Contracts for Difference): Enable profiting from price movements up or down without owning the metal, with leverage options — but with higher risks.

2026 Outlook: Three Possible Scenarios

By 2026, forecasts suggest the price of 21K gold per gram will range between 430 and 620 SAR:

Optimistic scenario (550-620 SAR): If geopolitical tensions persist, the dollar weakens, and central banks continue buying, this presents an opportunity to buy now and hold long-term.

Moderate scenario (480-550 SAR): The most likely, reflecting relative stability with limited fluctuations, offering good buying opportunities for long-term investment.

Pessimistic scenario (430-480 SAR): Could occur if the dollar strengthens or global interest rates rise, but the Saudi market tends to maintain relative stability due to strong local demand.

Conclusion: Those Who Monitor the Market Win

Understanding when gold prices decline in Saudi Arabia is not about luck but about systematically reading economic indicators and local seasonal factors. By monitoring the dollar index, bond yields, US employment data, and local demand cycles, investors can identify strong entry points.

Gold in Saudi Arabia is no longer just a traditional savings tool but has become part of a balanced investment portfolio. Whether you choose physical gold or modern financial instruments, the key is a clear strategy and close monitoring. Every temporary dip in prices could mark the start of a successful investment journey if you can interpret the right signals.