To outsiders, Dubai’s eager approach to wealth along with its fascination with glitz is amongst the city’s most intriguing traits. And as there is more for the emirate than supercars and cheap diamonds, the actual 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 about the precious metal, Dubai is an ideal destination to purchase it, but does that mean it’s a worthwhile investment? Possibly not, 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 can be volatile and there is absolutely no guarantee which you is likely to make anything.’ Unlike many investments, including shares and property, you can’t take money from using it adds Keren. ‘I’m more concerned that people build up their savings within a diversified portfolio for his or her long term benefit, than speculate on www.youtube.com/watch?v=dgYwRBwnQTw. It must be kept as not more than five percent of your total investment assets,’ she adds.
Should you decide to invest in gold, don’t be fooled into stocking on gold bars in one of Dubai’s gold dispensers (you’ll locate them in Atlantis, The Palm as well as the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor will not be going to buy 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 for your jewellery shops. ‘The most frequent strategy is probably by purchasing jewellery. This is largely sold by weight within the UAE [far from the truth elsewhere], along with the workmanship can boost the price,’ she says. The greater number of intricate the design, the greater number of you are likely to pay.
Gold bullions are offered with the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, and also online dealers. ‘You can start with a coin (some special UAE ones exist) costing less than Dhs1,000, a little bar of just an ounce, or move entirely approximately massive bars weighing several kilos,’ she says. ‘Bullions needs to be saved in a bank vault, not in your home.’
And once is the greatest time and energy to buy gold? ‘If only I could possibly predict that,’ says Keren. ‘The best time is when prices are low, so that you must keep watch over the industry,’ she says. But investors ought to be aware of indicators which bring about the fluctuating cost of gold, including sentiment, governments buying to market rega1 reserves and once equity charges are volatile. Regarding selling, Keren says holidays are usually a great time to strike. ‘You may see some small surges at times of holidays when gold is traditionally bought in a few countries,’ she says. ‘India is definitely the world’s biggest gold importer along with a lot is purchased at Diwali and Akshaya Tritiya, along with during Eid from the Muslim world.’
India could be the world’s biggest importer, however, there is often little understanding why Dubai is among the best places to buy gold. ‘It’s in part due to 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 funds in your budget,’ she says. ‘In many cultures this has been tradition for a woman to wear the family unit wealth, particularly ahead of the introduction of safe banking. Some traditions die hard.’
For those eyeing gold as an investment, Keren reiterates her view that it’s fundamental to proceed with caution. ‘When being bought for investment it must be considered an assets class like every other and the factor to a healthy investment portfolio is diversification. Never put all your cash into one asset.
That’s incredibly risky if you have no control over market prices,’ she says. But as long as you’re in Dubai, there’s no harm in adding the odd piece in your jewellery collection.