Smartest investment and life plans in UAE

Here's How You Can Buy Gold

By PolicyBazaar
  | Published: 17 January 2020 | Last Updated On: 18 January 2021

Invest in GOLD and give a boost to your investment portfolio

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Smartest investment and life plans in UAE

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For the people across the globe, who want to protect themselves from the volatility of the paper currencies, gold seems to be an attractive investment. However, the process in order to actually acquire gold is more complicated than just withdrawing money from an ATM Machine. It involves deciding the kind of gold you need, looking for a reputable retailer, making sure of the quality of gold, and afterwards making sure that the gold you purchased is stored safely.

Here is a thread explaining to you why you should invest in gold, how to go forward with your purchase, and the different types of gold investment out there.

Why Should You Buy Gold?

Diversification is the key to a healthy investment portfolio. Buying gold is one way by which you can diversify the kinds of investments you hold in your portfolio.  By diversifying your portfolio, you are shielding yourself from the risk of all your assets losing value.

This precious metal, in particular, is said to be a safe asset type. People hold confidence in gold because it has proved to hold value over the previous years. So often if someone is not very confident about paper currency or the stock market, then it is possible that he/she is more interested in the safety that gold offers. Another advantage of holding gold is that it is not that affected by inflation.

However, an important thing to understand before investing in gold is that it will not offer you any lucrative interest or return.  The gold price in UAE and other parts of the gold fluctuates just as it does for any other asset. But if you have the aim to make your money earning a lot of value, then you should not move forward with an investment in gold. You should hold gold as a part of your investment portfolio, it shouldn’t be your entire portfolio.

How Can You Buy Gold?

The first and foremost step when it comes to purchasing gold is to identify the kind of gold you want to purchase. You need to decide whether you wish to opt for scrap gold or gold jewellery, or if you want to buy gold bullions, and if so, then coins or bars, or if you would rather opt for gold ETFs. All these forms of gold have a buying process that slightly varies from one another, so deciding the type of gold you want to choose for your investment will save you a lot of energy and time.

For instance, you wish to opt for the gold bullion route, and you have come to a conclusion regarding the size of the coin or bar you wish to purchase, then you should move forward and start looking for a seller. It is very important to do proper research about the seller you narrow down. You should not take any dealer you come across blindly. Make sure they are reputable and have good customer reviews. It is also good to compare the gold price in UAE across the different providers. And once you have found ‘the one’ and made the purchase, it is time for you to decide on how you will store your gold. This decision is as important as having the right dealer. Nobody wants to end up in a theft situation with their gold, which is why a lot of people prefer storing gold using a bank’s locker facility or a safe at home.

Gold Bullion vs. ETFs

It is an undeniable fact that investment in gold bullion is safe. Though, you miss out on a bit of liquidity by buying bullion, because you will have to physically save your gold and sell it further to someone to get back the cash. If you are someone who wants to focus more on liquidity and safety, you can consider gold ETFs as it is a good option. With a gold ETF, you purchase shares of a fund that then purchase gold bullion. So you will never physically see or hold gold, but the buying and sell procedure is generally efficient.

Your priorities will decide the ideal option out of these two for you. If you wish to achieve the peace of mind of actually holding your gold, then bullions are your go-to. Whereas, if you wish to make the movement of your assets from gold to other securities with ease, then ETFs are more suitable for you.

In a Nutshell

Investing in gold can be a bit of complex as a procedure. However, it can be worth to bring diversity to your investment portfolio and hedge against factors such as inflation and volatility. The choices offered within the gold industry also help in tailoring your investment as per your preferences. If you have decided to add gold to your portfolio, always go with a dealer that has a good reputation in the market. Also, always plan ahead about where you are going to store your gold after the purchase. If these seem like a hassle to you, then you should opt for gold ETFs.

The bottom line is that investing in gold can be a good way to spread your risk across different investment securities. It is never a good idea to lay all your eggs in one basket.