To outsiders, Dubai’s eager strategy to wealth and its fascination with glitz is amongst the city’s most intriguing traits. And nevertheless there is more on the emirate than supercars and cheap diamonds, the very fact remains that, as 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 about the precious metal, Dubai is a great location to purchase it, but does that mean it’s a worthwhile investment? Possibly not, 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 an excellent investment,’ she says. ‘The price can be volatile and there is not any guarantee that you simply will make any 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 within a diversified portfolio for their long term benefit, than speculate on Regal Assets Dubai. It should be kept as no more than 5 percent of your respective total investment assets,’ she adds.
If you do decide to buy gold, don’t be fooled into stocking on gold bars from a 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 planning on buying from your machine, therefore i imagine it’s much more of a tourist souvenir, especially if you think about where the majority of the machines are.’ Instead, Keren suggests you head straight for your jewellery shops. ‘The most typical approach is probably by buying jewellery. This is certainly largely sold by weight within the UAE [untrue elsewhere], along with the workmanship can boost the price,’ she says. The greater number of intricate the design, the more you can expect to pay.
Gold bullions can be purchased at the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, in addition to online dealers. ‘You may start with a coin (some special UAE ones exist) costing less than Dhs1,000, a small bar of just an ounce, or move all the way as much as massive bars weighing several kilos,’ she says. ‘Bullions must be stored in a bank vault, not in your house.’
When is the greatest time and energy to buy gold? ‘If only I really could predict that,’ says Keren. ‘The best time is when prices are low, which means you must keep close track of the market,’ she says. But investors ought to be aware of indicators which bring about the fluctuating value of gold, including sentiment, governments buying to market rega1 reserves so when equity charges are volatile. Regarding selling, Keren says holidays are frequently the best time to strike. ‘You may see some small surges occasionally of holidays when gold is traditionally bought in many countries,’ she says. ‘India is the world’s biggest gold importer plus a lot is bought at Diwali and Akshaya Tritiya, in addition to during Eid within the Muslim world.’
India could be the world’s biggest importer, but there is however often little understanding as to why Dubai is probably the best places to buy gold. ‘It’s partly because of historical reasons and as a result of sheer volume of trade here. Both Arabs and Indians have historically been interested in gold as an option to putting profit the bank,’ she says. ‘In many cultures this has been tradition for a lady to wear the household wealth, particularly before the development of safe banking. Some traditions die hard.’
For people eyeing gold as being an investment, Keren reiterates her view that it’s imperative to proceed with caution. ‘When being bought for investment it needs to be considered an assets class like every other along with the answer to a well-balanced investment portfolio is diversification. Never place all your cash into one asset.
That’s incredibly risky in case you have no power over market prices,’ she says. But as long as you’re in Dubai, there’s no harm in adding the odd piece to the jewellery collection.