For centuries, gold has been one of the most coveted assets. And, why shouldn’t be it? From ancient civilizations to modern investors, everyone prefers investing in gold bars because the precious metal has stood the test of time as a symbol of wealth and a hedge against inflation. However, like any investment, buying gold, especially in the form of gold bars, comes with its own set of risks. 

This is why today, we are going to talk about everything there’s to consider before you buy gold online or invest in gold bars, so your hard-earned money is safe and you have considered all the risk factors.

Why Invest in Gold Bars?

Before we take a deep dive into the risks, let’s take a moment to talk about why gold bars are so attractive in the first place. Well, with the global economy in flux and inflationary pressures in different parts of the world, many people are turning to gold as a hedge against uncertainty, and gold bars in particular have become popular among those who want to make a solid investment. 

Why? Because they are easy to store, you can invest in gold bars by buying them in bulk, and these bars often carry a higher purity level as compared to other forms of gold like coins or jewelry. In addition, if you have a stash of gold bars, it feels like you have really got something tangible, right?

Though now you know all the bells and whistles of investment in gold, owning gold bars isn’t just about the luxury of having them. In fact, there are a number of risks and considerations you need to consider before making such an investment. 

#1 Where Are You Going to Store Gold Bars?

The UAE’s increased reserve is a part of the worldwide trend. In fact, the World Gold Council (WGC) reported that last year central banks added about 1,037 tons of gold to their reserves. 

The UAE has massive gold reserves, and even if you have some portions of it in the form of heavy gold bars, let us tell you, they are very desirable to thieves. So, storing them securely is quite an issue. You cannot just leave them in the drawer under your mattress. In fact, keeping gold bars at home isn’t just risky; it’s you asking for trouble. 

This is why most people who think about investing in gold bars, think about a secure vault at first. Luckily, the UAE also has plenty of options from banks to private vault companies that specialize in precious metals storage, and the storage fees can vary depending on the value of gold. 

#2 Counterfeit and Fraud Risks

Investment in gold is a wise option, but people constantly live in fear of the possibility of purchasing fake gold. Yes, the market for counterfeit gold is exponentially growing as some fraudsters have become really good at replicating the appeal of real gold bars. Thus, it’s tough for even experienced buyers to tell the difference, but it isn’t impossible. 

The UAE gold market is stringently regulated and most dealers are reputed and certified. So, always opt for those dealers who offer certificates of authenticity and have a rock-solid industry reputation that isn’t tarnished. 

#3 Volatile Gold Prices

Although most people consider gold as a safe investment, they need to understand that it’s not entirely immune to market fluctuations. In fact, the price of gold can go up or down based on different factors, including political instability, global economic conditions, and changes in the value of the US dollar. Yes, the gold bar price in the UAE has conventionally been stable, but yet it’s subject to global trends.

#4 Liquidity: How Easy Is It to Sell?

Another thing to think about is liquidity because when you invest in stocks or bonds, you can usually sell them quickly, in fact, you can sell them within minutes or hours. However, with gold bars the case is different. Selling physical gold is more complicated and it can take time. 

So, if you need to sell your gold bars, you will have to find a reliable and reputed buyer, which could be a dealer, an auction house, or even a private collector. And when you sell, don’t expect to get the same price you paid. Gold dealers typically buy back at a lower price than what you would find in the market because they need to make a profit too.

#5 Taxes and Regulations

For those who want to invest in gold, let us tell you the tax landscape is quite favorable in the UAE. There’s no VAT on gold and no capital gains tax. But, this doesn’t mean you are free from all sorts of regulatory concerns. For instance, certain regulations still exist which affect how you can buy, sell, or transport gold in and out of the country. In addition, as gold is considered a valuable asset, you also need to ensure that your gold investment in the UAE is properly declared and secured, especially in cases where you plan to leave the country or pass the gold down as an inheritance. 

Need more information on investing in gold bars or looking for a platform that can help you with the same? Check out what Save In Gold has to offer.