To outsiders, Dubai’s eager approach to wealth as well as its fascination with glitz is amongst the city’s most intriguing traits. And nevertheless there is more towards the emirate than supercars and cheap diamonds, the actual fact remains that, as 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 on the precious metal, Dubai is an ideal place 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 features a crystal ball it’s impossible to calculate if gold is an excellent investment,’ she says. ‘The price might be volatile and there is absolutely no guarantee that you just can make any cash.’ Unlike many investments, including shares and property, you can’t take an income as a result adds Keren. ‘I’m more concerned that individuals develop 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 not more than 5 percent of the total investment assets,’ she adds.
Should you do decide to purchase gold, don’t be fooled into stocking through to gold bars from a single of Dubai’s gold dispensers (you’ll discover them in Atlantis, The Palm and The Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is just not going to buy from your machine, so I imagine it’s more of a tourist souvenir, especially if you think about where a lot of the machines are.’ Instead, Keren suggests you head straight to the jewellery shops. ‘The most typical approach is probably by buying jewellery. This is largely sold by weight inside the UAE [far from the truth elsewhere], as well as the workmanship can boost the price,’ she says. The more intricate the design and style, the greater number of you can expect to pay.
Gold bullions can be bought in the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You can start by using a coin (some special UAE ones exist) costing under Dhs1,000, a very small bar of just an ounce, or move all the way up as much as massive bars weighing several kilos,’ she says. ‘Bullions must be saved in a bank vault, not within your house.’
When is the best time for you to buy gold? ‘If only I could predict that,’ says Keren. ‘The best time takes place when costs are low, which means you must keep an eye on the current market,’ she says. But investors ought to be aware about indicators which play a role in the fluctuating expense of gold, including sentiment, governments buying to market rega1 reserves and once equity charges are volatile. As for selling, Keren says holidays are frequently a fun time to strike. ‘You may see some small surges occasionally of holidays when gold is traditionally bought in certain countries,’ she says. ‘India is the world’s biggest gold importer along with a lot is purchased at Diwali and Akshaya Tritiya, in addition to during Eid in the Muslim world.’
India could possibly be the world’s biggest importer, there is however often little understanding that explains why Dubai is probably the the best places to buy gold. ‘It’s to some extent as a result of historical reasons and because of the sheer level of trade here. Both Arabs and Indians have historically been keen on gold rather than putting cash in the lender,’ she says. ‘In many cultures it has been tradition for a lady to use the family unit wealth, particularly just before the coming of safe banking. Some traditions die hard.’
For all 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 should be considered an assets class as with any other and also the answer to a well-balanced investment portfolio is diversification. Never place all your money into one asset.
That’s incredibly risky in case you have no control over market prices,’ she says. But provided that you’re in Dubai, there’s no harm in adding the odd piece in your jewellery collection.