To outsiders, Dubai’s eager approach to wealth and its fascination with glitz is probably the city’s most intriguing traits. And as there is more for the emirate than supercars and cheap diamonds, the simple fact remains that, as 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. With no tax on the precious metal, Dubai is a perfect destination to purchase it, but does that mean it’s a worthwhile investment? Not necessarily, 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 a good investment,’ she says. ‘The price can be volatile and there is not any guarantee that you just will make any cash.’ Unlike many investments, including shares and property, you can’t take an income from this adds Keren. ‘I’m more concerned that individuals develop their savings within a diversified portfolio for their long-term benefit, than speculate on www.youtube.com/watch?v=dgYwRBwnQTw. It must be kept as a maximum of 5 percent of your own total investment assets,’ she adds.
If you decide to purchase gold, don’t be fooled into stocking on gold bars in one of Dubai’s gold dispensers (you’ll see them in Atlantis, The Palm and also the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is not going to buy from a machine, and so i imagine it’s even more of a tourist souvenir, especially when considering where a lot of the machines are.’ Instead, Keren suggests you head straight for the jewellery shops. ‘The most common strategy is probably by purchasing jewellery. This is largely sold by weight from the UAE [not the case elsewhere], and the workmanship can boost the price,’ she says. The better intricate the design and style, the more you will probably pay.
Gold bullions can be purchased at the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, as well as online dealers. ‘You will start using a coin (some kind of special UAE ones exist) costing less than Dhs1,000, a very small bar of just an ounce, or move all the way approximately massive bars weighing several kilos,’ she says. ‘Bullions ought to be stored in a bank vault, not in your house.’
When is the perfect time and energy to buy gold? ‘If only I was able to predict that,’ says Keren. ‘The best time occurs when charges are low, which means you must keep an eye on the current market,’ she says. But investors should be aware about indicators which give rise to the fluctuating expense of gold, including sentiment, governments buying to market rega1 reserves so when equity charges are volatile. Regarding selling, Keren says holidays are usually a great time to strike. ‘You may see some small surges sometimes 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 purchased at Diwali and Akshaya Tritiya, along with during Eid inside the Muslim world.’
India may be the world’s biggest importer, however, there is often little understanding as to why Dubai is among the best places to buy gold. ‘It’s partly because of historical reasons and due to sheer amount of trade here. Both Arabs and Indians have historically been interested in gold rather than putting profit the bank,’ she says. ‘In many cultures it has been tradition for a lady to wear your family wealth, particularly just before the introduction of safe banking. Some traditions die hard.’
For those eyeing gold being an investment, Keren reiterates her view that it’s vital to proceed with caution. ‘When being bought for investment it must be considered an assets class like all other along with the step to a balanced investment portfolio is diversification. Never place all your cash into one asset.
That’s incredibly risky once you have no control of market prices,’ she says. But provided that you’re in Dubai, there’s no harm in adding the odd piece to the jewellery collection.