The 36-year-old Spaniard believes the club would be better off abandoning their pursuit of the Tottenham star and feels the title battle will be fierce in La Liga this season
The Santiago Bernabeu outfit have been pursuing the Welshman throughout the summer, with Spurs chairman Daniel Levy holding out for a world-record fee of £100 million.
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"[Bale] is a wonderful player,” he told Al-Sadd's official website.
"I understand the Real Madrid board is working hard to assemble the best team possible. But the price is too high."
Raul also backed Carlo Ancelotti to make a real fight of the Liga title race this season after the club finished 15 points adrift of rivals Barcelona in 2012-13.
"Jose Mourinho did a very good job with the team, but Carlo Ancelotti is one of the best coaches in the world," said the 36-year-old.
"Barcelona has great players, so the two teams will push each other to the limits this year."