Gold just had its best year since 1979, surging 66% in 2025. As of January 13, 2026, gold has reached over $4,600 per ounce—up 73% from this time last year.
For expats in Saudi Arabia, where gold holds cultural significance for weddings and wealth preservation, understanding this rally matters. Whether you’re buying jewelry or considering investments, here’s what’s driving prices and where experts think they’re headed.
Also See: Gold Rates in Saudi Arabia Today
The Current Situation
Gold started 2025 around $2,600 per ounce. It broke through $4,000 in October and hasn’t stopped climbing. In Saudi Arabia, this means jewelry that cost SAR 10,000 last year might now cost SAR 17,000 or more.
Trade concerns, reduced demand for the U.S. dollar and increased central bank buying combined to create ideal conditions for this historic upswing.
Central Banks Are Buying Heavily
The biggest driver is central bank demand. For the first time since 1996, gold now accounts for a larger share of central bank reserves than U.S. Treasuries.
China has been particularly aggressive, buying gold for 13 consecutive months through November 2025 while reducing U.S. Treasury holdings. Around 755 tonnes of central bank purchases are expected in 2026—nearly double the pre-2022 average.
Countries want diversification away from the dollar and protection against economic uncertainty. This structural shift provides strong support for prices.
What Experts Predict for 2026
Major financial institutions are bullish on gold’s prospects:
- J.P. Morgan: Forecasts an average gold price of nearly $5,055 per ounce in Q4 2026
- Goldman Sachs: Around $4,900 per ounce by end of 2026
- Bank of America: A likely path to $5,000 per ounce
- UBS: $5,000 by Q3 2026, with upside to $5,400
- Ed Yardeni: Year-end target of $6,000 an ounce
Most forecasts cluster between $4,500 and $5,000, suggesting another 5-10% gain ahead.
Key Drivers Behind the Rally
Safe Haven Demand: Global tensions, conflicts, and political uncertainty push investors toward gold as protection.
Weaker Dollar: A weaker US dollar is helping boost gold prices, as it makes buying gold relatively more affordable for international investors.
Debt Concerns: Concerns about enormous government deficits and debt burdens are driving investors to look toward gold as a safe haven.
Investment Flows: Gold ETFs posted their sixth consecutive monthly inflow in November, with total ETF assets striking a record $530 billion.
Limited Supply: Gold producers have increased their mine supply by only 0.3% per year on average since 2018.
Potential Headwinds
Not everything points upward. As the price of gold climbs higher, central banks will need to purchase less of it to achieve their reserve targets.
Jewelry demand is already showing signs of weakness, with second-quarter demand the worst since the third quarter of 2020. If the dollar strengthens or geopolitical tensions ease, gold could face pressure.
What This Means for You
For Saudi expats, gold’s rise makes jewelry purchases more expensive but increases the value of gold you already own. As an investment, gold can diversify portfolios and hedge against currency risks.
Financial advisors typically suggest gold should be 5-10% of your portfolio. You can buy physical gold, gold ETFs, or use gold savings accounts offered by some banks.
Rather than timing the market, consider buying small amounts regularly to smooth out price fluctuations.
Looking Ahead
Gold’s rally reflects genuine economic concerns and a structural shift in how countries manage reserves. The consensus suggests prices will likely remain between $4,500 and $5,000 through 2026, with potential for higher if conditions remain supportive.
Expect volatility along the way. Gold rarely moves in a straight line, but the underlying forces supporting higher prices remain strong.
For those in Saudi Arabia, staying informed helps whether you’re buying jewelry, investing, or planning finances in an uncertain world.