Gold prices continued their historic rally at the start of trading this week (Monday), registering unprecedented price jumps that reinforced the precious metal's status as a key safe haven in global markets. An ounce of gold reached a record high of $4,350, reflecting the surge in demand and economic tensions driving investors toward solid assets.
Strong gains supported by interest rate cuts
This remarkable rise was fueled by daily gains of approximately $49 per session, representing a growth rate of 1.14%. This surge continues the positive trend observed in the precious metals market over the past few weeks. Economic analysts directly link these price jumps to the interest rate cut announced last Wednesday, as the relationship between gold and interest rates is inverse; the lower the interest rate and the lower the yields on bonds and debt instruments, the more attractive gold becomes, given that it does not generate a periodic return but rather preserves value.
Gold as a safe haven amid global concerns
This strong performance cannot be separated from the global economic context, where concerns are growing about a slowdown in economic growth in major economies. Historically, investors and financial institutions have turned to gold during times of economic and political uncertainty, viewing it as a store of value less affected by inflation than paper currencies. With bond yields declining, traders have found increasing their gold positions a more attractive and prudent investment option to protect their portfolios against potential volatility.
Gold prices in the Saudi market
This global surge was immediately reflected in the local market in Saudi Arabia. According to the latest trading data, the price of a gram of 24-karat gold jumped to 526 Saudi riyals. This is the standard for investment and savings bars, and the price includes stamping fees that vary depending on the weight and type of bar.
As for the most commonly traded and sought-after gold jewelry, a gram of 21-karat gold was priced at 460 riyals. Consumers should note that this is the price of the raw material, as it includes the cost of labor, which varies from one merchant to another and from one piece to another, in addition to the seller's profit margin and value-added tax (VAT). Similarly, a gram of 18-karat gold, known for its diverse and modern designs, was priced at 395 riyals, and is also subject to the same additional costs related to labor and VAT.
In conclusion, this continued rise indicates that gold still retains its luster as a key investment tool, especially in light of indicators that suggest continued pro-growth monetary policies, which keeps the door open for further gains in the near future.
