To outsiders, Dubai’s eager approach to wealth along with its fascination with glitz is one of the city’s most intriguing traits. And while there is more for 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 tax around the precious metal, Dubai is an ideal location to purchase it, but does that mean it’s a worthwhile investment? Not really, in accordance with Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone features a crystal ball it’s impossible to calculate if gold is a good investment,’ she says. ‘The price may be volatile and there is not any guarantee that you simply is likely to make money.’ Unlike many investments, including shares and property, you can’t take money from using it adds Keren. ‘I’m more concerned that folks build-up their savings in the diversified portfolio for his or her long-term benefit, than speculate on https://www.youtube.com/watch?v=dgYwRBwnQTw. It should be kept as at most 5 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 see them in Atlantis, The Palm and also the Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor is not really thinking about buying coming from a machine, and so i imagine it’s much more of a tourist souvenir, especially considering where most of the machines are.’ Instead, Keren suggests you head straight for the jewellery shops. ‘The most typical strategy is probably by buying jewellery. This is largely sold by weight within the UAE [far from the truth elsewhere], along with the workmanship can increase the price,’ she says. The greater intricate the design and style, the greater number of you will definitely pay.
Gold bullions can be purchased with the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, along with online dealers. ‘You may start with a coin (some special UAE ones exist) costing lower than Dhs1,000, a little bar of just an ounce, or move entirely up to massive bars weighing several kilos,’ she says. ‘Bullions should be kept in a bank vault, not within your house.’
When is the greatest a chance to buy gold? ‘If only I could possibly predict that,’ says Keren. ‘The best time takes place when prices are low, so that you must keep close track of the market,’ she says. But investors ought to be aware about indicators which give rise to the fluctuating value of gold, including sentiment, governments buying to sell rega1 reserves so when equity prices are volatile. Concerning selling, Keren says holidays tend to be a good time to strike. ‘You may see some small surges from time to time 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 possibly be the world’s biggest importer, however, there is often little understanding why Dubai is probably the the best places to buy gold. ‘It’s in part because of historical reasons and as a result of sheer volume of trade here. Both Arabs and Indians have historically been keen on gold rather than putting cash in your budget,’ she says. ‘In many cultures this has been tradition for a woman to utilize your family wealth, particularly just before the coming of safe banking. Some traditions die hard.’
For all those eyeing gold as 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 along with the factor to a healthy investment portfolio is diversification. Never place all your hard earned dollars into one asset.
That’s incredibly risky when you have no control over market prices,’ she says. But so long as you’re in Dubai, there’s no harm in adding the odd piece in your jewellery collection.