To outsiders, Dubai’s eager approach to wealth and its fascination with glitz is one of the city’s most intriguing traits. And nevertheless there is more on the emirate than supercars and cheap diamonds, the fact remains that, among the world’s great gold trading hubs, our city is where to adorn yourself with riches.
In July 2013, gold posted its worst quarterly drop in 113 years. Without having tax about the precious metal, Dubai is a great location to buy it, but does that mean it’s a rewarding investment? Not really, as outlined by Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone carries a crystal ball it’s impossible to calculate if gold is a great investment,’ she says. ‘The price can be volatile and there is absolutely no guarantee that you will make any cash.’ Unlike many investments, including shares and property, you can’t take earnings from this adds Keren. ‘I’m more concerned that individuals increase their savings within a diversified portfolio for long term benefit, than speculate on https://www.youtube.com/watch?v=dgYwRBwnQTw. It must be kept as at most 5 percent of your respective total investment assets,’ she adds.
If you decide to buy gold, don’t be fooled into stocking on gold bars from a of Dubai’s gold dispensers (you’ll see them in Atlantis, The Palm as well as the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor will not be going to buy from the machine, so I imagine it’s more of a tourist souvenir, especially considering where most of the machines are.’ Instead, Keren suggests you head straight to the jewellery shops. ‘The most popular approach is probably by buying jewellery. This is certainly largely sold by weight within the UAE [incorrect elsewhere], and also the workmanship can improve the price,’ she says. The greater number of intricate the design and style, the greater you will probably pay.
Gold bullions are sold in the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You will start with a coin (some kind of special UAE ones exist) costing under Dhs1,000, a little bar of just an ounce, or move completely up to massive bars weighing several kilos,’ she says. ‘Bullions needs to be saved in a bank vault, not within your house.’
So when is the perfect time for you to buy gold? ‘If only I was able to predict that,’ says Keren. ‘The best time is when costs are low, so that you must monitor the current market,’ she says. But investors also need to be mindful of indicators which play a role in the fluctuating expense of gold, including sentiment, governments buying to market rega1 reserves so when equity costs are volatile. Concerning selling, Keren says holidays are often the best time to strike. ‘You may see some small surges at times of holidays when gold is traditionally bought in a few countries,’ she says. ‘India is definitely the world’s biggest gold importer along with a lot is bought at Diwali and Akshaya Tritiya, along with during Eid from the Muslim world.’
India could possibly be the world’s biggest importer, but there is however often little understanding why Dubai is among the best places to buy gold. ‘It’s to some extent because of historical reasons and as a result of sheer volume of trade here. Both Arabs and Indians have historically been keen on gold as an option to putting cash in the lender,’ she says. ‘In many cultures it really has been tradition for a lady to put on your family wealth, particularly ahead of the coming of safe banking. Some traditions die hard.’
For those eyeing gold as an investment, Keren reiterates her view that it’s vital to proceed with caution. ‘When being bought for investment it should be considered an assets class as with any other along with the step to a healthy investment portfolio is diversification. Never put all your money into one asset.
That’s incredibly risky once you have no control over market prices,’ she says. But given that you’re in Dubai, there’s no harm in adding the odd piece for your jewellery collection.