To outsiders, Dubai’s eager procedure for wealth and its particular fascination with glitz is probably the city’s most intriguing traits. And while there is more towards the emirate than supercars and cheap diamonds, the very fact remains that, as 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 in the precious metal, Dubai is a great destination to buy 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 includes a crystal ball it’s impossible to predict if gold is a great investment,’ she says. ‘The price may be volatile and there is absolutely no guarantee that you simply will make money.’ Unlike many investments, including shares and property, you can’t take money from this adds Keren. ‘I’m more concerned that individuals build up their savings in a diversified portfolio for long-term benefit, than speculate on Regal Assets Dubai. It must be kept as not more than 5 percent of your respective total investment assets,’ she adds.
Should you do decide to get gold, don’t be fooled into stocking through to gold bars from 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 will not be thinking about buying from your machine, therefore i imagine it’s more of a tourist souvenir, especially when considering where most of the machines are.’ Instead, Keren suggests you head straight for the jewellery shops. ‘The most common strategy is probably by purchasing jewellery. This can be largely sold by weight inside the UAE [untrue elsewhere], as well as the workmanship can improve the price,’ she says. The better intricate the design and style, the more you are likely to pay.
Gold bullions can be purchased with the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, and also online dealers. ‘You will start by using a coin (some special UAE ones exist) costing below Dhs1,000, a very small bar of just an ounce, or move entirely as much as massive bars weighing several kilos,’ she says. ‘Bullions ought to be saved in a bank vault, not in your home.’
Then when is the ideal time to buy gold? ‘If only I could predict that,’ says Keren. ‘The best time happens when prices are low, so you must monitor the market,’ she says. But investors should be aware about indicators which play a role in the fluctuating price of gold, including sentiment, governments buying to offer rega1 reserves and when equity pricing is volatile. Concerning selling, Keren says holidays are frequently the best time to strike. ‘You may see some small surges from time to time of holidays when gold is traditionally bought in a few countries,’ she says. ‘India will be the world’s biggest gold importer plus a lot is bought at Diwali and Akshaya Tritiya, in addition to during Eid inside the Muslim world.’
India could possibly be the world’s biggest importer, but there is however often little understanding that explains why Dubai is probably the the best places to buy gold. ‘It’s in part due to historical reasons and due to sheer amount of trade here. Both Arabs and Indians have historically been interested in gold as an option to putting funds in your budget,’ she says. ‘In many cultures it has been tradition for a woman to utilize the family unit wealth, particularly ahead of the coming of safe banking. Some traditions die hard.’
For anyone eyeing gold being an investment, Keren reiterates her view that it’s fundamental to proceed with caution. ‘When being bought for investment it ought to be considered an assets class like any other and also the key to a healthy investment portfolio is diversification. Never place all your money into one asset.
That’s incredibly risky if you have no control over market prices,’ she says. But given that you’re in Dubai, there’s no harm in adding the odd piece to your jewellery collection.