RIYADH, SAUDI ARABIA – Saudi Arabia’s large gold reserves have been crucial in boosting its economic confidence and ensuring financial stability as the Gulf countries in general recognize the importance of gold reserves in diversifying investment portfolios and securing national currency while regulating financial market fluctuations.
According to a report by the Saudi Arabia’s Al-Eqtisadiah newspaper, the Kingdom holds 323.1 tons of gold, making it the largest Arab central bank with gold reserves, accounting for 21.4 percent of the 1507.7 tons held by the central banks of Arab countries by the end of 2022.
Saudi Arabia ranks 18th among the world’s top gold owners, which includes the International Monetary Fund (IMF) and the European Central Bank, while Saudi Arabia ranks 16th among countries worldwide, excluding the IMF and the European Central Bank.
Qatar ranked second in the Gulf and seventh in the Arab world with reserves of 91.8 tons, accounting for 6.1 percent of the total, while the UAE ranked third in the Gulf and eighth in the Arab world with reserves of 79.95 tons, accounting for 5.3 percent of the Arab total. Kuwait ranked fourth in the Gulf and ninth in the Arab world, with reserves of 79 tons, accounting for 5.2 percent of the Arab total.
With 4.7 tons, Bahrain ranked fifth in the Gulf and 14th in the Arab world. Finally, Oman ranked 15th in the Arab world, with 1.9 tons of gold reserves.
According to the data, many Gulf countries increased their gold reserves in 2022 compared to the previous year. Qatar added 35 tons of gold to its reserves to become the fourth country in the world to buy gold in 2022 as part of Doha’s drive to improve its metal’s balance.
The UAE purchased 24.5 tons of gold in 2022, making it the world’s eighth-largest gold buyer, while Oman increased its gold reserves from 0.2 tons to 1.9 tons.
The total amount of gold owned by central banks in the Gulf countries is more than 4,415 tons, valued at more than US$152.6 billion.
According to the World Gold Council, the value of Saudi Arabia’s gold reserves is estimated to be around US$18.8 billion, or 3.8 percent of the central bank’s reserves, while the value of Qatar’s gold reserves is estimated to be around US$5.4 billion, or 11.6 percent of the Central Bank of Qatar’s total reserves.
The UAE’s gold reserves are estimated to be worth US$4.7 billion, or 3.6 percent of the UAE Central Bank’s total reserves, while Kuwait’s gold reserves are worth US$4.6 billion, or 9 percent of the Kuwaiti Central Bank’s total reserves.
In comparison, Bahrain and Oman have relatively small amounts of gold. The value of gold in the Bahraini Central Bank is estimated to be US$272 million, or 6.1 percent of the bank’s total reserves, while Oman’s total gold reserves are approximately US$110 million, accounting for 0.7 percent of the Central Bank’s total holdings.
Gold Mines
Due to the scarcity of this precious metal, the Gulf countries resort to purchasing gold. However, the majority of the natural gold mines in the GCC are located in Saudi Arabia and Oman.
The Al-Duwayhi mine in the Makkah Al-Mukarramah region, which began production in 2016 and is the largest producer of Saudi gold, is one of the most notable gold mines in the Kingdom, as its production volume reached approximately 249 thousand ounces in 2020.
Other mines in Saudi Arabia include the Al-Amar mine, the Bulghah mine, the Sukhaybarat mine, the Al-Souq mine, Mahd Al-Dahab, and the Mansoura-Masra project.
Saudi gold ore production was around 430,000 ounces in 2022, with the government expecting it to rise by 30 percent year on year in 2023.
Gold is frequently found in Oman in areas where copper is present, as its presence is always associated with that mineral ore, and its extraction is extremely expensive.
According to the data, Oman produced approximately 7,700 kilograms of gold and 50,000 kilograms of silver through the Oman Mining Company between 1985 and 2007, before production was halted due to technical, financial, and administrative difficulties.
The country intends to increase its gold production to 50,000 ounces per year. This may strengthen its position on the global map of precious metal and associated metal producers.