Evidence suggests the Saudi central bank has been covertly buying 160 tonnes of gold in Switzerland since early 2022, contributing to the current gold bull market.

Although the Saudis played a key role in the birth of the global dollar standard in the early 1970s, this time around they might even become a lynchpin for its dissolution.

Introduction

Until recently, Saudi Arabia's gold demand would decline when the gold price went up and strengthen when the price went south. This dampened volatility in the gold market, which for many decades was ruled by the West.

Ever since the West immobilized Russia's dollar assets in February 2022, those with diplomatic disagreements with the West are increasingly exchanging their dollars for physical gold. Saudi Arabia is the latest country—after China and Thailand—of which I have found cross-border trade statistics showing it has shifted from being price sensitive to a price driver.

During the entire rally from late 2022 until present, the Saudis have been a constant net importer which has boosted the gold price. The icing on the cake is that part of the flow into Saudi Arabia, the gold coming from Switzerland, actually goes to the Saudi central bank, aka the Saudi Arabian Monetary Authority (SAMA).

Exposing Saudi Central Bank's Hidden Gold Buying

Formally, any country's cross-border gold trade statistics refer to "non-monetary" metal, meaning privately owned. Monetary gold—owned by central banks—is exempt from being disclosed in trade numbers. As I have demonstrated in a previous article, though, the non-monetary gold crossing the Chinese border is often a shipment heading for the vaults of the People's Bank of China (PBoC) regardless.

Among industry insiders, SAMA is known for having accelerated secret gold purchases since 2022. By comparing the World Gold Council's (WGC) estimates of total central bank buying (based on field research), to what central banks report to have bought to the International Monetary Fund (IMF), we can conclude "unreported" purchases went through the roof starting in 2022. People familiar with the matter, but who prefer to stay anonymous, told me this is largely due to the PBoC, and to a lesser extent SAMA. That's clue number one.