To outsiders, Dubai’s eager strategy to wealth as well as its fascination with glitz is one of the city’s most intriguing traits. And while there is more on the emirate than supercars and cheap diamonds, the simple fact remains that, as among the world’s great gold trading hubs, our city is the place to adorn yourself with riches.
In July 2013, gold posted its worst quarterly drop in 113 years. Without any tax about the precious metal, Dubai is a perfect location to purchase it, but does that mean it’s a rewarding investment? Possibly not, based on Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone has a crystal ball it’s impossible to calculate if gold is a superb investment,’ she says. ‘The price could be volatile and there is absolutely no guarantee that you just can make anything.’ 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 in the diversified portfolio for their long-term benefit, than speculate on Regal Assets Dubai. It ought to be kept as at most five percent of your own total investment assets,’ she adds.
Should you decide to get gold, don’t be fooled into stocking on gold bars from a single of Dubai’s gold dispensers (you’ll find them in Atlantis, The Palm as well as the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is not really planning on buying from your machine, so I imagine it’s much more of a tourist souvenir, especially when you consider where most of the machines are.’ Instead, Keren suggests you head straight for your jewellery shops. ‘The most common strategy is probably by purchasing jewellery. This is certainly largely sold by weight from the UAE [incorrect elsewhere], and the workmanship can increase the price,’ she says. The greater number of intricate the design, the more you can expect to pay.
Gold bullions can be bought on the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, and also online dealers. ‘You will start with a coin (some special UAE ones exist) costing lower than Dhs1,000, a small bar of just an ounce, or move all the way around massive bars weighing several kilos,’ she says. ‘Bullions must be held in a bank vault, not in your own home.’
When is the greatest time to buy gold? ‘If only I could possibly predict that,’ says Keren. ‘The best time happens when costs are low, therefore you must keep an eye on the market,’ she says. But investors ought to be aware of indicators which bring about the fluctuating expense of gold, including sentiment, governments buying to market rega1 reserves and once equity pricing is volatile. Regarding selling, Keren says holidays are frequently a great time to strike. ‘You may see some small surges from time to time of holidays when gold is traditionally bought in a few countries,’ she says. ‘India is the world’s biggest gold importer and a lot is purchased at Diwali and Akshaya Tritiya, and also during Eid from the Muslim world.’
India may be the world’s biggest importer, there is however often little understanding as to the reasons Dubai is probably 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 money in the financial institution,’ she says. ‘In many cultures it has been tradition for a lady to put on the family unit wealth, particularly ahead of the coming of safe banking. Some traditions die hard.’
For those eyeing gold as being an investment, Keren reiterates her view that it’s important to proceed with caution. ‘When being bought for investment it needs to be considered an assets class like any other as well as the answer to a balanced investment portfolio is diversification. Never place all your hard earned money into one asset.
That’s incredibly risky when you have no control of market prices,’ she says. But so long as you’re in Dubai, there’s no harm in adding the odd piece to the jewellery collection.