To outsiders, Dubai’s eager approach to wealth along with its fascination with glitz is probably the city’s most intriguing traits. And while there is more for the emirate than supercars and cheap diamonds, the very 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 tax about the precious metal, Dubai is a great destination to purchase it, but does that mean it’s a rewarding investment? Not always, as outlined by Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone carries a crystal ball it’s impossible to predict if gold is a good investment,’ she says. ‘The price may be volatile and there is not any guarantee that you can certainly make any money.’ Unlike many investments, including shares and property, you can’t take an income as a result adds Keren. ‘I’m more concerned that people increase their savings in a diversified portfolio for his or her long term benefit, than speculate on https://www.youtube.com/watch?v=dgYwRBwnQTw. It should be kept as not more than 5 percent of the total investment assets,’ she adds.
If you do decide to purchase gold, don’t be fooled into stocking on gold bars from one 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 just not going to buy from your machine, and so 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 frequent method is probably by buying jewellery. This is certainly largely sold by weight inside the UAE [not the case elsewhere], and the workmanship can boost the price,’ she says. The greater intricate the look, the better you will probably pay.
Gold bullions can be purchased with the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, in addition to online dealers. ‘You can begin with a coin (some special UAE ones exist) costing below Dhs1,000, a small bar of just an ounce, or move entirely around massive bars weighing several kilos,’ she says. ‘Bullions must be stored in a bank vault, not in your home.’
When is the best time for you to buy gold? ‘If only I really could predict that,’ says Keren. ‘The best time occurs when charges are low, so you must monitor the current market,’ she says. But investors should be aware of indicators which give rise to the fluctuating expense of gold, including sentiment, governments buying to promote rega1 reserves and when equity charges are volatile. As for selling, Keren says holidays are usually the best time to strike. ‘You may see some small surges from time to time of holidays when gold is traditionally bought in some countries,’ she says. ‘India may be the world’s biggest gold importer and a lot is purchased at Diwali and Akshaya Tritiya, and also during Eid inside the Muslim world.’
India could be the world’s biggest importer, but there is however often little understanding why Dubai is amongst the the best places to buy gold. ‘It’s in part on account of historical reasons and due to sheer amount of trade here. Both Arabs and Indians have historically been keen on gold rather than putting funds in the lender,’ she says. ‘In many cultures it has been tradition for a woman to utilize the family wealth, particularly prior to the introduction of safe banking. Some traditions die hard.’
For those eyeing gold as 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 as with any other as well as the answer to a well-balanced investment portfolio is diversification. Never put all your hard earned dollars into one asset.
That’s incredibly risky if 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 for your jewellery collection.