To outsiders, Dubai’s eager method of wealth along with its fascination with glitz is probably the city’s most intriguing traits. And nevertheless there is more on the emirate than supercars and cheap diamonds, the fact remains that, as one of 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 on the precious metal, Dubai is an ideal location to buy it, but does that mean it’s a worthwhile investment? Not really, based on 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 not any guarantee that you just can certainly make anything.’ Unlike many investments, including shares and property, you can’t take earnings from using it adds Keren. ‘I’m more concerned that men and women build up their savings in the diversified portfolio for his or her long-term benefit, than speculate on Regal Assets Dubai. It should be kept as at most 5 percent of your total investment assets,’ she adds.
If you decide to get gold, don’t be fooled into stocking up on gold bars in one 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 is not really going to buy from your machine, thus i imagine it’s a greater portion of a tourist souvenir, especially when you consider where many of the machines are.’ Instead, Keren suggests you head straight to the jewellery shops. ‘The most typical method is probably by purchasing jewellery. This really is largely sold by weight from the UAE [incorrect elsewhere], along with the workmanship can improve the price,’ she says. The greater intricate the design, the better you will probably pay.
Gold bullions are sold with the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You will start by using a coin (some special UAE ones exist) costing lower than Dhs1,000, a tiny bar of just an ounce, or move all the way up as much as massive bars weighing several kilos,’ she says. ‘Bullions needs to be stored in a bank vault, not within your house.’
Then when is the ideal time for you to buy gold? ‘If only I really could predict that,’ says Keren. ‘The best time occurs when prices are low, therefore you must monitor the industry,’ she says. But investors should also be conscious of indicators which play a role in the fluctuating price of gold, including sentiment, governments buying to sell rega1 reserves and once equity costs are volatile. Concerning selling, Keren says holidays tend to be a great time to strike. ‘You may see some small surges from time to time of holidays when gold is traditionally bought in many countries,’ she says. ‘India is definitely the world’s biggest gold importer plus a lot is bought at Diwali and Akshaya Tritiya, as well as during Eid in the Muslim world.’
India could be the world’s biggest importer, however, there is often little understanding as to the reasons Dubai is probably the the best places to buy gold. ‘It’s in part due to historical reasons and due to sheer level of trade here. Both Arabs and Indians have historically been keen on gold as an alternative to putting cash in your budget,’ she says. ‘In many cultures this has been tradition for a lady to wear the family wealth, particularly just before the introduction of safe banking. Some traditions die hard.’
For people eyeing gold as an investment, Keren reiterates her view that it’s important to proceed with caution. ‘When being bought for investment it should be considered an assets class as with any other and the key to a healthy investment portfolio is diversification. Never put all your cash into one asset.
That’s incredibly risky when 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.