Gold has always been considered as a symbol of Wealth and Security. Investors throughout the world have learned over time to trust Gold not only as a hedge against inflation but also as a store of value and safe haven in times of Economic uncertainty. The Industry for Gold Trading is booming, hence establishing the United Arab Emirates as a Global Center for Gold Trade.
In this blog, we will look into the methods of Trading Gold, participation of companies involved in the Trade of Gold in UAE, advantages and disadvantages involved in the trading of Gold and how one can get into trading of Gold.
Understanding Gold Trading in the UAE
The UAE has its tradition linked with Gold trade, particularly Dubai, often known as the “City of Gold”. Dubai’s location, modern infrastructure and tax-free trading environment make it an attractive destination for Gold Traders. At present, the Gold trading in UAE comprises both physical and online trading options, allowing investors to trade or invest in Gold in various forms like Bullion, Ornaments, Futures and Contracts for Difference (CFDs).
Several Gold Trading Companies in UAE provide services for both Retail and Institutional Investors who in turn have access to the Gold Market. These firms work as Agents work as Agents to enable investors to purchase, sell and perhaps store Gold in different forms.
Types of Gold Investments
There are multiple ways to invest in Gold in the UAE, from purchasing physical Gold to trading Gold through financial products. Each method has its advantages and disadvantages, depending on the investor’s goals, risk tolerance, and knowledge of the Market.
- Physical Gold
- Gold Bullion and Coins: One of the oldest ways of investing is in what may be termed as physical or owning Gold in the form of bars, bullions or coins. Such investment is considered ideal for those people who want to possess tangible Assets. In Dubai, there are many point of purchases for Gold bullion ranging from the leading Dubai Gold Souk to Gold trading firms in UAE.
- Gold Jewellery: Although with high mark-ups and making charges, many Individuals in the UAE continue to spend on Gold Jewelleries simply because it acts as a store of value and Wealth and people’s Asset. The desire to own Gold Jewellery can be seen by the numerous Souks and Showrooms of Gold across the Country.
- Gold EFTs (Exchange-Traded Funds)
Gold ETFs are similar to Mutual Funds and are used as a Financial Instrument to follow the price offer of Gold. They are traded on Stock Exchanges and as an added advantage of investing in the commodity, one does not have to keep the physical Gold. These EFTs can be bought by Investors in the UAE either directly from local Brokers or online Stock Trading Companies so that they do not have to directly invest in the physical Gold,
- Gold Futures and Options
This precious Metal can however be traded in the form of Futures and Options on the Dubai Gold and Commodities Exchange (DGCX). These are financial contracts the returns on which are directly linked to fluctuations in the price of Gold. Trading in Gold Futures and Options offers potential for significant profit but also involves substantial risk due to the leverage involved.
- Gold CFDs
Contracts for Difference (CFDs) are over the Counter Financial Derivatives which enable the Traders with an opportunity to trade on the price of Gold without actually owning Gold. The CFDs are leveraged Instruments and therefore allow an Investor to have influence over a large exposure to the Market with a small amount of capital outlay. However, it should be understood that trading in CFDs is highly risky, and an Investor might lose all their Capital.
Benefits of Gold Trading in UAE
UAE holds several advantages for those who plan to invest in Gold which makes investment in it a perfect one.
- Tax-Free Environment
In fact, the most significant benefit trading Gold in UAE is that there is no Capital Gains Tax. Unlike many other Countries, the UAE does not charge any taxes to the sale of Gold hence helping Investors to keep all the profits from their trade.
- Strategic Location
Due to the geographical location of UAE connecting Asia, Africa and Europe the Country is prominent in Gold Market. Dubai especially has a very large Market for Gold, as the hub of the Ports and Airports makes easy for import and export to various International Markets.
- Well-Regulated Market
The UAE has put in place some robust regulations to increase the security and legitimacy of the Industry trading in Gold. Institutions such as the Dubai Multi Commodities Center (DMCC), are instrumental in making sure that any Gold trading Companies in the UAE are adhering to International Standards.
- Diversified Investment Options
Whether it is physical Gold, Gold ETFs or Online Trading, the UAE offers a wide spread array of options for satisfying the varying needs of various types of Investors. Gold Trading Companies in UAE would offer services especially to beginner as well as to expert traders to make portfolio diversification easier.
Risks Associated with Gold Trading
The investments in Gold have its benefits, but it is not risk-free. Before trading in the game of Gold, one needs to know the downsides as well.
- Price Volatility
The price of Gold fluctuates hugely with changes in Global Economic conditions, geopolitical events and currency movements. Despite the fact that Gold is often seen as a safe haven asset, its prices can soar—even fall—during a downturn due to its extremely volatile nature and the possibility of speculators losing money on short-term trades.
- Leverage Risks in CFDs
It is worth noting that by trading Gold CFDs, there is a possibility of leverage involved; hence, traders are able to control a higher position than they would if their capital did so. This means that whatever the profits that might be reaped as a result of this form of trading, the potential losses are on a higher level. Trading CFDs thus involves caution in the Management of risk and should only be as recommended to those who know their way around the complexities involved.
- Storage and Insurance Costs for Physical Gold
If one is investing in physical Gold, the expenses of storage and insurance may decrease your returns on investment. The storage of Gold is done in secure vaults while the asset will incur an extra cost for insurance.
Online Gold Trading in UAE
The ease of online transactions has gained online Gold trading popularity within the UAE due to huge technological advancement. Today, most of the Online Trading Platforms offer a trading features in Gold for UAE, and the Investors can sell their Gold in real time from anywhere in the World. These Platforms allows the Global Gold Markets become much easier to reach for the users alongside abundant trading resources and tools that make it easy for each trader to reach the right decisions.
Features of Gold Trading Online Platforms
- Live Market Data: Investors will have real-time access to live Gold prices and other market-related information, so traders will be able to trade on time.
- Trading Tools: Most online platforms provide Gold trading with sophisticated trading tools, including risk management facilities and technical analysis graphs that help traders plan appropriately.
How to Select the Best Gold Trading Company in UAE
While making the choices for the Gold Trading Company in UAE, there are a few things that must be considered to choose an appropriate and trusted Partner as you them.
- Reputation and Credibility
Always choose the best one that has a good reputation in the Market, along with a history of providing good services to its Customers.
- Trading Platform
The platform must be user-friendly, readily providing all needed market data, tools and resources. A well-designed Platform will enhance your trading experience and improve decision-making.
- Fees and Commissions
Compare the fees and commissions of the different firms in Gold trading. You can make some big differences as lower fees would work effectively by being profitable on many of your frequent trades.
- Customer Support
Finally, a good Customer support is very crucial, especially to new traders who need to learn several things in the course of their trading, it should be ascertained that the Company provides responsive, helpful, and knowledgeable Customer Services.
Conclusion
Gold trading in the UAE provides numerous investment opportunities from those just beginning to invest to experts. Whether you do it the old way with physical Gold, or you are one of the smart guys who have been using the latest trend Online Gold trading in UAE, there are myriad ways to Cash in on Gold. However, it is rather important to note the risks involved and invest in reputed Gold Trading Companies in UAE to protect your investment.
Newera Capital Markets Limited more popularly known as Newera 365, is one good place to start if you are a first-time Gold Trader or even experienced one. The Management is having combined experience of over 50 years, Newera 365 provides an easy-to-use trading Platform, extensive access to financial products, and robust risk management tools. This ensures that you are well-equipped and sufficiently supported to achieve your financial goal.
