To outsiders, Dubai’s eager strategy to wealth and its fascination with glitz is amongst the city’s most intriguing traits. And as there is more on 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 having tax in the precious metal, Dubai is a great place to buy it, but does that mean it’s a worthwhile investment? Not necessarily, according to Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone includes a crystal ball it’s impossible to calculate if gold is a great investment,’ she says. ‘The price could be volatile and there is no guarantee that you simply can make any cash.’ Unlike many investments, including shares and property, you can’t take money from using it adds Keren. ‘I’m more concerned that folks develop their savings in the diversified portfolio for long-term benefit, than speculate on Regal Assets Dubai. It ought to be kept as at most five percent of your total investment assets,’ she adds.
Should you do decide to buy gold, don’t be fooled into stocking high on gold bars from one of Dubai’s gold dispensers (you’ll see them in Atlantis, The Palm and The Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is not really planning on buying from a machine, and so i imagine it’s a greater portion of a tourist souvenir, especially when you consider where the majority of the machines are.’ Instead, Keren suggests you head straight to the jewellery shops. ‘The most frequent strategy is probably by purchasing jewellery. This is largely sold by weight from the UAE [not the case elsewhere], and the workmanship can raise the price,’ she says. The greater number of intricate the style, the better you will probably pay.
Gold bullions are offered at the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You will start with a coin (some special UAE ones exist) costing under Dhs1,000, a small bar of just an ounce, or move all the way up to massive bars weighing several kilos,’ she says. ‘Bullions must be saved in a bank vault, not in your home.’
And once is the ideal a chance to buy gold? ‘If only I could predict that,’ says Keren. ‘The best time takes place when pricing is low, therefore you must monitor the current market,’ she says. But investors should be conscious of indicators which give rise to the fluctuating price of gold, including sentiment, governments buying to sell rega1 reserves and whenever equity costs are volatile. In terms of selling, Keren says holidays tend to be a fun time to strike. ‘You may see some small surges occasionally of holidays when gold is traditionally bought in some countries,’ she says. ‘India will be the world’s biggest gold importer plus a lot is bought at Diwali and Akshaya Tritiya, as well as during Eid within the Muslim world.’
India could be the world’s biggest importer, but there is often little understanding as to why Dubai is one of the best places to buy gold. ‘It’s in part as a result of historical reasons and due to sheer volume of trade here. Both Arabs and Indians have historically been keen on gold as an option to putting money in your budget,’ she says. ‘In many cultures it really has been tradition for a lady to wear the household wealth, particularly before the introduction of safe banking. Some traditions die hard.’
For those eyeing gold 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 every other and also the step to a balanced investment portfolio is diversification. Never put all your hard earned dollars into one asset.
That’s incredibly risky when you have no power over market prices,’ she says. But so long as you’re in Dubai, there’s no harm in adding the odd piece for your jewellery collection.