The battle for Dan Gold heats up: Saudi Arabia challenges the trade pattern of consecutive years

At the beginning of the year, geopolitical competition in the Middle East entered a new phase. Saudi Arabia is challenging the traditionally single-country-dominated gold market, with this economic contest directly targeting the connection point that has long controlled Sudan’s gold exports. After relations between Sudan and certain neighboring countries deteriorated, this war-torn country began seeking new trading partners, and Saudi involvement is reshaping the entire region’s gold flow.

From Single Dependency to Multiple Channels

In the past, Sudan’s gold export routes were very straightforward. According to official data, in the first nine months of 2024, Sudan exported approximately 10.9 tons of gold valued at over $1.05 billion. The vast majority of this gold has gone to buyers who have maintained dominance for many years. However, since the political confrontation two years ago, Sudan has actively sought alternative trading partners.

Saudi actions have been swift and clear. A Saudi refining company expressed to Sudan’s National Mineral Resources Authority its willingness to “immediately initiate gold procurement.” This signal indicates that Saudi Arabia not only intends to participate but also aims to quickly establish trade connections. Although specific transaction sizes and timelines have not been disclosed, and Saudi officials have yet to comment officially, this move has already attracted significant attention.

Geopolitical Competition Extending into the Economic Sphere

The power struggle among Middle Eastern major powers, which has long existed, is now finding new expression in the gold trade. Analysts point out that Saudi Arabia’s move represents a direct challenge to regional economic influence and could open new competitive frontiers in the business sector. Notably, this expansion is not limited to a single commodity but involves a broader contest for dominance within the entire economic system.

However, experts remain cautious. Some analysts believe that Saudi Arabia may face difficulties in fully replacing the long-established trade networks in the short term. Therefore, this step is more of a political statement than an economic upheaval. Nonetheless, it has become a new focal point in the power struggle across the Middle East.

Sudan’s Financial Dilemma and the Strategic Significance of Gold

For Sudan, ravaged by civil war, gold export revenue is crucial. The country faces not only the direct damage caused by armed conflicts but also severe economic hardship. Income from gold trade has become a key source of funds to sustain the country’s operations.

However, smuggling and illegal gold trading significantly undermine the economic benefits Sudan can realize. Official estimates suggest that up to 80% of domestic gold production may be lost through informal channels, resulting in potential annual revenue losses of up to $5 billion. Against this backdrop, establishing direct cooperation with new international trade partners can ensure transparency in gold flows and help more revenue flow back into the national treasury.

Future Uncertainties and Rebalancing

As Saudi Arabia increases its involvement in Sudan’s gold market, the entire gold trade landscape may undergo profound structural changes. This not only affects short-term trade flows but could also reshape long-term economic relationships. Amid ongoing civil war and heavy economic pressure, Sudan is seeking the most advantageous partners among various forces. The competition among Middle Eastern powers for regional commercial influence is gradually manifesting in this reallocation of gold trade.