To outsiders, Dubai’s eager method of wealth and its fascination with glitz is among the city’s most intriguing traits. And as there is more for the emirate than supercars and cheap diamonds, the simple fact remains that, among 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 around the precious metal, Dubai is a perfect destination to purchase it, but does that mean it’s a worthwhile investment? Not really, 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 superb investment,’ she says. ‘The price might be volatile and there is no guarantee that you simply will make any cash.’ Unlike many investments, including shares and property, you can’t take earnings as a result adds Keren. ‘I’m more concerned that people build up their savings inside a diversified portfolio with regard to their long-term benefit, than speculate on Regal Assets Dubai. It needs to be kept as no more than 5 percent of your total investment assets,’ she adds.
Should you do decide to invest in gold, don’t be fooled into stocking on gold bars from a single 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 will not be thinking about buying from the machine, thus i imagine it’s even more of a tourist souvenir, especially considering where a lot of the machines are.’ Instead, Keren suggests you head straight to the jewellery shops. ‘The most common strategy is probably by buying jewellery. This is certainly largely sold by weight inside the UAE [untrue elsewhere], as well as the workmanship can boost the price,’ she says. The greater intricate the style, the greater number of you are likely to pay.
Gold bullions are offered in the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You can begin using a coin (some special UAE ones exist) costing under Dhs1,000, a very small bar of just an ounce, or move entirely up to massive bars weighing several kilos,’ she says. ‘Bullions needs to be kept in a bank vault, not in your own home.’
And once is the perfect time to buy gold? ‘If only I really could predict that,’ says Keren. ‘The best time happens when prices are low, so that you must keep an eye on the market,’ she says. But investors should also be aware about indicators which bring about the fluctuating cost of gold, including sentiment, governments buying to market rega1 reserves and when equity pricing is volatile. As for selling, Keren says holidays tend to be the best time to strike. ‘You may see some small surges occasionally 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 bought at Diwali and Akshaya Tritiya, in addition to during Eid from the Muslim world.’
India might be the world’s biggest importer, however, there is often little understanding as to the reasons Dubai is one of the best places to buy gold. ‘It’s to some extent on account of historical reasons and due to the sheer number of trade here. Both Arabs and Indians have historically been interested in gold instead of putting money in the lender,’ she says. ‘In many cultures it really has been tradition for a woman to put on the family wealth, particularly ahead of the development of safe banking. Some traditions die hard.’
For those eyeing gold as being an investment, Keren reiterates her view that it’s fundamental to proceed with caution. ‘When being bought for investment it needs to be considered an assets class like any other as well as the factor to a balanced investment portfolio is diversification. Never place all your hard earned dollars into one asset.
That’s incredibly risky if 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.