To outsiders, Dubai’s eager method of wealth along with its fascination with glitz is amongst the city’s most intriguing traits. And as there is more towards the emirate than supercars and cheap diamonds, the simple fact remains that, as one of 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 around the precious metal, Dubai is an ideal place to purchase it, but does that mean it’s a worthwhile investment? Not really, in accordance with Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone has 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 is likely to make money.’ Unlike many investments, including shares and property, you can’t take money as a result adds Keren. ‘I’m more concerned that people build-up their savings within a diversified portfolio for their long-term benefit, than speculate on https://www.youtube.com/watch?v=dgYwRBwnQTw. It should be kept as a maximum of five percent of your own total investment assets,’ she adds.
Should you do decide to buy gold, don’t be fooled into stocking high on gold bars from one of Dubai’s gold dispensers (you’ll find them in Atlantis, The Palm and The Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor will not be going to buy from your machine, thus i imagine it’s more of a tourist souvenir, especially if you think about where many of the machines are.’ Instead, Keren suggests you head straight for that jewellery shops. ‘The most common method is probably by buying jewellery. This really is largely sold by weight inside the UAE [far from the truth elsewhere], along with the workmanship can increase the price,’ she says. The more intricate the design and style, the greater number of you can expect to pay.
Gold bullions are sold at the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You can begin by using a coin (some special UAE ones exist) costing below Dhs1,000, a small 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 in your house.’
When is the perfect time to buy gold? ‘If only I could predict that,’ says Keren. ‘The best time happens when charges are low, so you must keep close track of the market,’ she says. But investors also need to be conscious of indicators which contribute to the fluctuating cost of gold, including sentiment, governments buying to market rega1 reserves and when equity prices are volatile. Regarding selling, Keren says holidays tend to be a good time to strike. ‘You may see some small surges occasionally of holidays when gold is traditionally bought in many countries,’ she says. ‘India will be the world’s biggest gold importer along with a lot is bought at Diwali and Akshaya Tritiya, along with during Eid in the Muslim world.’
India could possibly be the world’s biggest importer, there is however often little understanding as to the reasons Dubai is probably the the best places to buy gold. ‘It’s in part because of historical reasons and due to sheer volume of trade here. Both Arabs and Indians have historically been interested in gold rather than putting cash in the lender,’ she says. ‘In many cultures it really has been tradition for a lady to utilize the family unit wealth, particularly prior to the introduction of safe banking. Some traditions die hard.’
For people eyeing gold being 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 as well as the step to a balanced investment portfolio is diversification. Never place all your money into one asset.
That’s incredibly risky in case you have no power over market prices,’ she says. But provided that you’re in Dubai, there’s no harm in adding the odd piece for your jewellery collection.