To outsiders, Dubai’s eager strategy to wealth as well as its fascination with glitz is amongst the city’s most intriguing traits. And nevertheless there is more on 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 where 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 destination to buy it, but does that mean it’s a rewarding investment? Not necessarily, 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 can be volatile and there is no guarantee that you just can make anything.’ Unlike many investments, including shares and property, you can’t take earnings from it adds Keren. ‘I’m more concerned that folks increase their savings inside a diversified portfolio for long-term benefit, than speculate on Regal Assets Dubai gold. It should be kept as a maximum of five percent of your total investment assets,’ she adds.
Should you decide to get gold, don’t be fooled into stocking up on gold bars from 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 is not going to buy from your machine, and so i imagine it’s much more of a tourist souvenir, especially considering where a lot of the machines are.’ Instead, Keren suggests you head straight for your jewellery shops. ‘The most frequent strategy is probably by purchasing jewellery. This can be largely sold by weight in the UAE [untrue elsewhere], along with the workmanship can increase the price,’ she says. The more intricate the design and style, the better you will definitely pay.
Gold bullions can be purchased on the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, as well as online dealers. ‘You can start by using a coin (some kind of special UAE ones exist) costing below Dhs1,000, a tiny bar of just an ounce, or move entirely as much as massive bars weighing several kilos,’ she says. ‘Bullions ought to be held in a bank vault, not in your own home.’
So when is the best a chance to buy gold? ‘If only I was able to predict that,’ says Keren. ‘The best time takes place when costs are low, so that you must keep close track of the industry,’ she says. But investors should be mindful of indicators which contribute to the fluctuating expense of gold, including sentiment, governments buying to offer rega1 reserves so when equity charges are volatile. Regarding selling, Keren says holidays are often a great time to strike. ‘You may see some small surges at times of holidays when gold is traditionally bought in certain 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 from the Muslim world.’
India could possibly be the world’s biggest importer, there is however often little understanding why Dubai is one of the best places to buy gold. ‘It’s partly because of historical reasons and because of the sheer amount of trade here. Both Arabs and Indians have historically been keen on gold rather than putting profit your budget,’ she says. ‘In many cultures it really has been tradition for a lady to put on the family unit wealth, particularly ahead of the advent of safe banking. Some traditions die hard.’
For people eyeing gold as an investment, Keren reiterates her view that it’s vital to proceed with caution. ‘When being bought for investment it should be considered an assets class as with any other along with the factor to a balanced investment portfolio is diversification. Never place all your cash into one asset.
That’s incredibly risky if 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 your jewellery collection.