To outsiders, Dubai’s eager strategy to wealth and its fascination with glitz is one of the city’s most intriguing traits. And nevertheless there is more towards the emirate than supercars and cheap diamonds, the simple 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 any tax in the precious metal, Dubai is a perfect destination to purchase it, but does that mean it’s a rewarding investment? Not always, according to 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 can be volatile and there is no guarantee which you can certainly make any money.’ Unlike many investments, including shares and property, you can’t take earnings from this adds Keren. ‘I’m more concerned that men and women develop their savings in the diversified portfolio for long-term benefit, than speculate on https://www.youtube.com/watch?v=dgYwRBwnQTw. It needs to be kept as not more than five percent of the total investment assets,’ she adds.
If you decide to buy gold, don’t be fooled into stocking on gold bars from a of Dubai’s gold dispensers (you’ll find them in Atlantis, The Palm and The Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is just not planning on buying from a machine, and so i imagine it’s much more 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 typical approach is probably by buying jewellery. This is certainly largely sold by weight in the UAE [not the case elsewhere], and the workmanship can raise the price,’ she says. The more intricate the design and style, the greater 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 having a coin (some special UAE ones exist) costing less than Dhs1,000, a very 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 house.’
And once is the ideal time and energy 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 marketplace,’ she says. But investors also need to be conscious of indicators which bring about the fluctuating value of gold, including sentiment, governments buying to sell rega1 reserves and once equity prices are volatile. In terms of selling, Keren says holidays are often a fun time to strike. ‘You may see some small surges sometimes of holidays when gold is traditionally bought in a few countries,’ she says. ‘India is definitely the world’s biggest gold importer plus a lot is purchased at Diwali and Akshaya Tritiya, in addition to during Eid inside the Muslim world.’
India might be the world’s biggest importer, however, there is often little understanding as to the reasons Dubai is probably the best places to buy gold. ‘It’s to some extent due to historical reasons and due to sheer level of trade here. Both Arabs and Indians have historically been interested in gold instead of putting money in the bank,’ she says. ‘In many cultures it really has been tradition for a woman to put on the household wealth, particularly before the development of safe banking. Some traditions die hard.’
For people eyeing gold as an investment, Keren reiterates her view that it’s imperative to proceed with caution. ‘When being bought for investment it should be considered an assets class like any other and also the factor to a balanced investment portfolio is diversification. Never put all your hard earned money into one asset.
That’s incredibly risky once you have no power over market prices,’ she says. But as long as you’re in Dubai, there’s no harm in adding the odd piece to the jewellery collection.