The WGC's latest report showed SAMA's gold reserve figure had climbed to 322.9 tons, 2.8 percent of reserves, compared to the 143 tons (1.2 percent) reported in March.

The WGC said its gold data was modified from the first quarter of 2008 as a result of the adjustment of SAMA's gold accounts.

At that level, SAMA's total official holdings of gold are worth about $14.33 billion, or roughly 3.5 percent of the country's total SR1.55 trillion ($413 billion) stored in foreign assets.

“The adjustment in SAMA's gold reserves, which translates to an increase in gold assets, should not be a surprise nor should it lead to exaggerated conclusions,” said chief economist of Banque Saudi Fransi, John Sfakianakis.

“SAMA's investment policy does not preclude the acquisition of assets when markets and valuations are right and opportune, hence I would not be surprised if at some point the central bank acquired bullion in the lows of 2008 as precious commodities dropped during the financial crisis.”

He added that the report’s findings did not represent a shift in the conservative and liquid asset allocation policy of SAMA or a signal about its perception of sovereign debt and its implications.

“If you look at the official SAMA gold reserves, they amount to SR1.5 billion as of April 2010 and they increased from SR689 million in 2007,” he said.

“Even if we use the data of the World Gold Council, SAMA's bullion reserves amount to 3.5 percent of the central bank's foreign assets, which are not structurally significant.”

He said these were adjusted in 2008 and again in March 2010, adding the total official gold assets were a fraction of the SR1.55 trillion in SAMA's foreign assets.

"So I wouldn't call this a secular shift in strategy or a change of risk profile or a hedging strategy over and beyond the policies followed by SAMA." When opportunities arise, SAMA takes them.

He added that if markets perceived SAMA gold assets or acquisitions as significant as per WGC’s report, then bullion prices would not have dropped by more than $13 per ounce in one day.

Gold prices hit a record high of $1,262.75 an ounce briefly in London on Monday.

"It is a good move by SAMA to increase gold holdings as per the WGC report as it will help boost confidence," said Faisal Alsayrafi, managing director and CEO of the Financial Transaction House (FTH).

Saudi Arabia rose from No. 24 to 16 in the world in terms of official gold holdings, one spot behind Venezuela but a notch ahead of the United Kingdom. Topping the list is the United States, which holds about 8,133.5 tons of gold in its official reserves while Germany is second with 3,406.8 tons.