Buying Gold in Dubai

There are two things most famous about Dubai – its skyscrapers and its gold. In case you are visiting or recently moved here, you might have many questions regarding buying gold from here and also taking it back to your home country. I am in the same boat. So, here I have put together some Q&As that might help you make a better decision:

  1. Is gold really cheaper in Dubai and Why?

In order to understand this, it is important to understand what constitutes price of gold you buy:

Price of the gold ornament is  =  Price of 22K/18K gold * ( Weight in Grams + Wastage charges) + ( Making Charges)  + VAT

 Price of Gold

The prices of gold metal are fairly standard throughout the world. The below table compares the prices of gold as of 29 April 2013.

Image

Source: Sify finance, Khaleej Times, gold price network

As seen in the above table, the prices of gold are more or less similar across countries.

Wastage charges

This depends upon the intricacy of design you choose. This includes the weight of gold that is wasted/lost during the design/crafting process. This wastage charge is more common with branded jewellery providers than local jewellers.

Making charges

Making charges is another component added by jewelers to compensate for the workmanship effort put by them. This essentially is their profit margin. In India, making charges vary from INR 50 to INR 1500 per gram. In Dubai, the charges range from AED10 per gram to AED 500 per gram. Making charges are usually higher on 18K jewellery since more contemporary designs are available in 18k gold. If you are buying from local jewelers, be ready to bargain on this.

VAT

The other factor that affects the price of gold is the VAT or value added tax applied on gold. Until 2000, there were different tax structure applicable on gold across Europe ranging from 17.5% to 0% making the market very unbalanced. Therefore in the year 2000, the VAT on gold was declared as exempt throughout the EU. In India, some states apply a 2% VAT on gold in ornament form.  In Dubai, there is no tax on the sale of gold

 Hence overall, looking at the price of gold, making charges and tax free structure of Dubai, gold is definitely cheaper here.

 2.     Where to buy gold from?

As discussed above, the price of gold remains standard throughout different providers in Dubai. However if you willing to haggle on the making charges, it would be a good idea to visit the Gold Souk. It has good choice of designs and price ranges. However, if you compared it to some of the big branded jewellery stores, they might not have very updated designs, and barring a few stores, the designs are a copy of each other.

Another advantage of visiting the gold souk is you get to see the World’s heaviest gold ring (Najmat Taiba, the world’s largest gold ring has a 5.17kg precious stone and weighs 58.7kg in gold) and lots of bling.

3.     Bargain or not to bargain?

Yes, yes. Bargain your heart out, but now you know what you need to bargain on! Just ask for the making charges and thrash the margin out of it. However, if you have put on your best shoes and gone to a fancy shancy place, you might want to keep your negotiation limited.

4.     Location of Gold Souk, and how to get there

The gold souk in Dubai is based in Deira. Since the area is popular, the taxi guys should be able to take you there. In case you are travelling by Metro, you can take the take the red line till Union metro station, switch to green line and go till Palm Diera or Al Ras metro station. It is walking distance from both. Get out of the station and get into the bylanes.

5.     Cash or Card

If you are buying gold from gold souk, it is definitely better to carry cash (or you can withdraw cash after you like something). Although cards are accepted, it makes a big difference while bargaining, if you are paying in cash. Both dollars and Dirhams are accepted.

6.     Taking it back home

I can tell you, if you are travelling back to India. In case of gold bullion, 7% duty (6% import duty and 1% VAT) on the gold value will have to be paid by you at the customs. However, for gold carried in the form of ornaments, there is an exemption on duties for NRIs. As part of the latest budget 2013-14, male passengers can carry gold worth INR 50,000, and female passengers INR100,000 duty free as compared to the earlier limit of INR 10,000 and INR 20,000, respectively. However, this is applicable only for NRIs living abroad for more than one year or those who are transferring their residence to India. This means that if you are here only for the shopping festival, you might have to use your skills and wallet to get through customs. If you are travelling to another country, it is better to check the local customs rules.

Hope this post clears some of your gold purchase related doubts. Happy bling diggin’ you all!

Advertisements

Dubai – World’s best

It is not uncommon to hear the “World’s biggest, tallest, largest” in Dubai. This magnificent land has many such feathers in its cap. Infact, it could just be the country with the highest number of World’s largest manmade creations. I tried to compile a quick list for your reference in case you are here and don’t want to miss out on any of the “Big ones”.

Dubai has the following largest, biggest tallest structure, many of which are already in the Guinness Book of World Records:

  • The tallest building, man made structure and free standing structure – Burj Khalifa
  • The world’s only 7-star hotel – Burj Al Arab, Dubai
  • The second-largest yacht in the world (Dubai, owned by the sheikh).
  • The largest mall in the world – Dubai Mall
  • The largest water cannon show in the world – Dubai Mall
  • The longest indoor ski slope in the world – Ski Dubai, Mall of the Emirates
  • The largest artificial islands in the world – Palm Islands (The Palm Jumeirah, The Palm Jebel Ali and The Palm Deira) in Dubai
  • The world’s biggest natural flower garden – Dubai Miracle Garden
  • World’s largest shoe store – Women listen up! – The Shoe district (Dubai Mall)
  • The largest gold ring in the world (The Gold Souq in Dubai)

Online Deals in Dubai

Just like the rest of the World, Dubai also has caught on to the online shopping fever. Multiple online portals are trying to snatch the small number of online buyers from each other. All these are virtually clones of each other. So much so, that the two most popular websites also have similar sounding names: Cobone and his brother Groupon.

Although I have been here only a few months, I have already had my share of excitement at finding 80% off on hair treatments, 60% off on hotel deals and what not. But being a cautious buyer, I have done my research. I’d like to share the same with you, because I care for you dear readers.

The discounts that are mentioned on these websites often mean that you are either paying for substandard service or making full payment only in the form of additional payments not covered in the deal. I’ll explain how.

First we were trying to book a weekend vacation in one of the Northern Emirates for our Anniversary. We checked several deals and compared the prices of these with the cost of same number of days stay at the same hotels through their online bookings. It turns out most hotels have some or the other offer on their website. Say, book 2 nights and get 30% off on the 3rd night or complimentary set dinner/breakfast etc. So you are not getting any real discount on the rooms from the deals. Although, some of these deals also come with complimentary tickets to a waterpark, zoo etc. However, even if you add the price of tickets to the hotel cost, you may still be somewhere near the same figure being advertised as 50% off. Moreover, some hotels have different sets of rooms they give out to guests who have made bookings through these deals. This was reluctantly admitted by one of the Hotels on Yas Island we were trying to book through Grupon. Eventually,we made bookings with another hotel with slightly better rooms at a cost little less than that advertised in the deal.

There are often annoying conditions attached with the deal buyers – such as you can’t use the coupon until 48 hours of purchase, or taxes are excluded from the deal, or you have to make a booking 48 hours in advance etc. I was trying to book a desert safari through one of these deals. I called the travel company first to confirm any preconditions. It was a Wednesday morning, I remember, and I wanted to book a safari for Friday evening. Technically I was 48 hours early. But this guy told me that I needed to make a booking 48 hours in advance and weekend was not counted in the 48 hours. So, even if I bought the vouchers at the very moment, they would pick it up for appointments only the next day. They were close on Thursday and Friday, which means I could ask for a booking only on Saturday and then count 48 hours from there. Blah. I’d rather pay 30 bucks extra and do it this weekend. And also not be treated like a poor cousin of direct-pay customers.

A third instance, very important, was at a driving school. I bought a deal that claimed to slash the  cost of my driving lessons by 50%. Despite this, I ended up paying AED 1600+ for other different kind of fees while registration. This included AED 100 for an eye test, AED 600 for theory classes, AED 60 for an information booklet, AED 150 for typing of my form in Arabic etc. However, later I learnt through my interaction with other students, that the fee structure for direct pay customers is different. And everyone ends up paying more or less the same. Maybe a difference of AED150 or something. Moreover, you have to visit the main branch for registration as compared to a direct payer who can walk into any outlet. I am already fearing that I might also be failed in my first driving test attempt just because they want me to pay for 10 more classes. Will keep you posted on this though.

Last, but not yet done, is an irresistible hair deal I bought for a keratin blowout. The treatment cost is around AED1,200  but this deal was only available for AED150. Right now I am kinda sick of my curls and want a sleek look. Keratin has been luring me for long. So I am taking the dive, despite all my concerns about the deal. Although, will take my precautions and keep you posted on how it goes.

Until then, you all, be informed, and happy shopping online!