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-- Posted Wednesday, 11 November 2009 | Digg This Article | | Source: GoldSeek.com

Dubai Police apprehended the suspects in a daring $1.6 million gold heist in the Dubai International Airport within 48 hours late last month. This case highlights the security issues surrounding gold ownership, and for local investors points to the usefulness of exchange traded funds to own gold.

The Dubai airport heist was no daring daylight raid by armed men. Rather a jeweler with 25 gold bars in his luggage was tracked by a gang who walked off with his suitcase when he put it down and looked away.

Dubai Police action

Apparently they had learned of his insecure gold carrying habit, and for good measure immediately sent the booty to Costa Rica via a courier service, hidden in electronic equipment. The jeweler did not see a thing but the Dubai Police has far a very modern and effective security system that came to the rescue.

But that is the problem with owning gold bars. How do you hide them? Clearly wondering around the airport with them is not a good idea. Under the bed? What about the maid? Bury them in the garden? What about the gardener?

Are you even sure that they are gold bars? Gold-plated tungsten has the same weight, so be sure to melt them down occasionally just to be certain, they might have been switched.

It is all very well owning a few items of jewelry and storing them in a modest safe to avert the evil eye. But if you are investing thousands or millions of dollars in gold then you need to adopt a more sophisticated approach.

The Dubai Gold Securities exchange traded fund is the perfect local solution. You get a certificate for one-tenth of an ounce of gold which is held against physical gold in a London depository run by HSBC.

Some people worry about ETFs and whether they would be redeemable in an Armageddon disaster situation. DGS claim that would not be a problem, and that holders could even go to HSBC in London and redeem the ETF at full market value.

Keep gold safe

Yet how likely is that, or that the third parties fail, although again DGS says that even this would make no difference to the holder’s entitlement. Surely you are far more likely to be robbed like the jeweler in Dubai airport if you insist on holding physical gold.

An alternative is the Perth Mint Depository System in Australia from a AAA-rated, 100 per cent government owned institution, which charges nothing for storage of unallocated gold and no commission for buying and selling it.

The place to keep gold is in a vault, don’t carry it around in your luggage!

-- Posted Wednesday, 11 November 2009 | Digg This Article

About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in 1999 to complete his first book, a history of the Bovis construction group.

Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.

Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.

He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.

Order my book online from this link

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