During my visit to Qatar in late September and early October I decided to revisit the Qatar Gold Souq area to see how the gold market was going and found out that Al Fardan Exchange had a notice that they weren’t selling gold for a week and Gulf Exchange said they were out of stock. When I inquired in the market about what was going on, one shop keeper stated that the exchanges weren’t going to sell any gold until the gold price went back up. This was a real shocker to me as they are the only places to get the investment grade bars (TT [116.6g] or higher), while the 100g bars and smaller could still be purchased from the various jewellery shops, but with higher premiums. I could understand them upping the premiums because the gold price is down, but stopping selling it completely is ridiculous, as individuals who may want to buy gold now that the price is down are completely cut out.
During the visit I also got notice that Qatar’s sovereign wealth fund (Qatar Holdings) plan to invest $10 billion through buying stakes in gold producers, including investing about $1bn in London-listed miner European Goldfields. This reminded me of Peter Schiff’s visit to Saudi Arabia in 2009 for the Global Competitiveness Forum, when he was recommending to Saudi investors to purchase gold miner, so they have access to the gold that was being mined, rather than going into the market and using that same money just to purchase gold.
United Arab Emirates
Well on my return from Qatar, I got stopped after I collected my luggage, when it went through the scanner. I had a 50 ounce (1.5 kilo) bar and a 10 ounce bar of silver with me and they wanted to know what it was. So after I told them it was silver, they asked me what it was for and I told them it was my personal property and I wasnt bringing it as a dealer/trader. They then asked if I had a bill for it, which I said no I didnt as I had purchased it years ago and the two individuals went back and forth about it in Arabic. In the end they let is slide, but one of them stated just as i was leaving that it is best for my own safety that I keep the bill. This blew my mind as it implied that its not safe for me to carry around precious metals without a bill and there isnt a time when i can ever through away the bill. What I was holding was worth around 5 thousand dirhams according to the silver price that day, but if I had the same amount in paper money, they wouldn’t blink an eye as it would easily fit in my wallet and of course it wouldnt have shown up in the scanner either. This is the double standard with real money and paper money. When you go to trade your paper money for real money, they dont ask you where you got that paper money from, but when you want to trade your real money for paper money, they want a copy of your ID. Same scenario when you’re travelling, as if you had travelled with over $ 10k to the US or Canada in paper money, they want you to declare it, but if they had found an equal amount of gold with me, they would demand that you show them a bill and may confiscate it without a bill.
Yesterday I went down to the Gold & Diamond Park on Sheikh Zayed Road and visited the shops I recommended in the UAE guide and was happy to see that two of the shops now had 1 kilogram of silver bars as well as gold TT bars. I had a similar experience when I had recently visited the Ajman Gold Souq, as more and more jewellery shops began stocking gold bullion bars and coins. This clearly shows how the market is going and how the demand for precious metal bullion is shifting their businesses. At the Gold & Diamond Park, I spoke with the staff of one of the shops and was informed that due to the high premiums in PAMP, gold bars from germany’s second largest bank (Commerzbank) have began circulating in the market.