To outsiders, Dubai’s eager procedure for wealth as well as its fascination with glitz is one of the city’s most intriguing traits. And nevertheless there is more towards the emirate than supercars and cheap diamonds, the very 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 tax on the precious metal, Dubai is a perfect place to purchase it, but does that mean it’s a worthwhile investment? Not always, as outlined by Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone has a crystal ball it’s impossible to predict if gold is a good investment,’ she says. ‘The price could be volatile and there is not any guarantee that you just will make money.’ Unlike many investments, including shares and property, you can’t take an income from using it adds Keren. ‘I’m more concerned that folks build up their savings in the diversified portfolio for his or her long term benefit, than speculate on Regal Assets Dubai. It must be kept as at most 5 percent of the total investment assets,’ she adds.
If you decide to buy gold, don’t be fooled into stocking through to gold bars from a single of Dubai’s gold dispensers (you’ll locate them in Atlantis, The Palm along with the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor will not be thinking about buying from your machine, thus i imagine it’s a greater portion of a tourist souvenir, especially when considering where most of the machines are.’ Instead, Keren suggests you head straight for the jewellery shops. ‘The most popular approach is probably by purchasing jewellery. This is certainly largely sold by weight inside the UAE [incorrect elsewhere], and the workmanship can raise the price,’ she says. The more intricate the design, the greater you are likely to pay.
Gold bullions are sold at the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, in addition to online dealers. ‘You can start using 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 needs to be held in a bank vault, not within your house.’
Then when is the ideal time to buy gold? ‘If only I could predict that,’ says Keren. ‘The best time occurs when prices are low, so you must keep watch over the market,’ she says. But investors should also be mindful of indicators which bring about the fluctuating cost of gold, including sentiment, governments buying to market rega1 reserves and whenever equity costs are volatile. In terms of selling, Keren says holidays tend to be the best 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 will be the world’s biggest gold importer as well as a lot is bought at Diwali and Akshaya Tritiya, in addition to during Eid in the Muslim world.’
India may 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 amount of trade here. Both Arabs and Indians have historically been interested in gold as an alternative to putting funds in the lender,’ she says. ‘In many cultures it has been tradition for a lady to put on your family wealth, particularly just before the development of safe banking. Some traditions die hard.’
For people eyeing gold being 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 like all other and the step to a well-balanced investment portfolio is diversification. Never place all your hard earned dollars into one asset.
That’s incredibly risky in case you have no control over market prices,’ she says. But as long as you’re in Dubai, there’s no harm in adding the odd piece to your jewellery collection.