عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Gold Hits Record High on Weak Dollar, Middle East Tensions

FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
TT
TT

Gold Hits Record High on Weak Dollar, Middle East Tensions

FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 16 March 2023, Bavaria, Munich: Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa

Spot gold prices hit a record high on Friday as a weak dollar, expectations of more U.S. interest rate cuts and tensions in the Middle East more than offset muted physical demand in Asia.

Spot gold was up 1.0% at $2,613.09 per ounce by 1058 GMT after hitting a record high of $2,614.49. US gold futures rose 0.9% to $2,638.30.

Non-yielding gold is up 27% so far this year, heading for its biggest annual rise since 2010. It got the latest boost from the start of the Federal Reserve's easing cycle on Wednesday, Reuters reported.

"We expect further dollar depreciation, as the Fed catches up with other central banks who started their cutting cycles earlier. That should be gold price positive," said WisdomTree commodity strategist Nitesh Shah.

Gold could hit $3,000 per ounce in a year amid geopolitical risks and investors hedging against a slowing economy, he added.

However, from a technical point of view, gold's Relative Strength Index moved into "overbought" territory on Friday, at 70.4.

"Over the last few weeks gold's inverse relationship with the US dollar, and indeed US treasury yields, has been very much reinstated," said independent analyst Ross Norman.

"The path of least resistance for gold looks to be to continue higher and, even though it looks well overbought and much above fair value, the momentum trades are behind it and price strength looks in order," Norman said.

Meanwhile, demand from the physical sector in Asia remains light and gold is trading there at a discount to the London price. Top consumer China did not import any gold from a major trading hub Switzerland in August, for the first time in 3-1/2 years.

In other metals, silver gained 1.8% to $31.32, platinum was steady at $989.21 and palladium fell 0.2% to $1,078.58.

Most Viewed

 
 
Business

Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
TT
TT

Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.