To outsiders, Dubai’s eager strategy to wealth and its fascination with glitz is probably the city’s most intriguing traits. And as 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 about the precious metal, Dubai is an ideal place to purchase it, but does that mean it’s a worthwhile investment? Possibly not, in accordance with Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone has a crystal ball it’s impossible to calculate if gold is a great investment,’ she says. ‘The price may be volatile and there is no guarantee that you just will make any cash.’ Unlike many investments, including shares and property, you can’t take money from it adds Keren. ‘I’m more concerned that people build-up their savings inside a diversified portfolio for long term benefit, than speculate on www.youtube.com/watch?v=dgYwRBwnQTw. It should be kept as at most five percent of your own total investment assets,’ she adds.
If you decide to purchase gold, don’t be fooled into stocking high on gold bars from a single of Dubai’s gold dispensers (you’ll discover them in Atlantis, The Palm and also the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is just not going to buy from a machine, so I imagine it’s even more of a tourist souvenir, especially when considering where the majority of the machines are.’ Instead, Keren suggests you head straight for your jewellery shops. ‘The most typical method is probably by purchasing jewellery. This really is largely sold by weight from the UAE [not the case elsewhere], and the workmanship can increase the price,’ she says. The greater intricate the design and style, the better you will definitely pay.
Gold bullions can be bought on the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, and also online dealers. ‘You may start having a coin (some kind of special UAE ones exist) costing below Dhs1,000, a tiny bar of just an ounce, or move all the way around massive bars weighing several kilos,’ she says. ‘Bullions needs to be kept in a bank vault, not in your house.’
And once is the best time and energy to buy gold? ‘If only I was able to predict that,’ says Keren. ‘The best time happens when prices are low, therefore you must monitor the current market,’ she says. But investors also need to be conscious of indicators which give rise to 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 are often a great time to strike. ‘You may see some small surges occasionally of holidays when gold is traditionally bought in many countries,’ she says. ‘India is the world’s biggest gold importer and a lot is bought at Diwali and Akshaya Tritiya, as well as during Eid in 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 to some extent on account of historical reasons and as a result of 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 woman to put on the household wealth, particularly just before the coming of safe banking. Some traditions die hard.’
For anyone eyeing gold for 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 and also the answer to a balanced investment portfolio is diversification. Never place 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 to your jewellery collection.