UAE bank offers gold buffs a glittering opportunity

In a bid to cash in on the recent volatility in gold prices and the traditional gold obsession among Indian sub-continent and Middle Eastern population, a Dubai-based bank is offering its customers the opportunity to invest in gold starting as low as Dh500, without the additional risk and costs associated with owning physical gold.

In a statement, Emirates NBD said it has launched a Gold Investment Account, which enables customers to buy gold in electronic form. The bank claimed that the account is “first-of-its-kind in the region.”

“The Middle East and Indian sub-continent have always had a great affinity towards gold, backed by its association with jewellery and its inherent quality as a safe haven investment,” said Shekhar Krishnamurthy, Head of Retail Assets and Liabilities, Emirates NBD.

“Given the double-digit growth rate that gold has shown in recent years, it continues to play a major role in banking wealth in the region, and more and more of our retail customers have expressed interest in investing in the precious metal,” he added.

The bank’s statement explained that the bank’s existing customers holding a current or savings account in UAE Dirhams or US Dollars are automatically eligible to open the new gold account online to start investing in electronic gold.

“Similar to any other foreign currency account, the Gold Investment Account is designated with the currency code XAU, and is denominated in ounces, reflecting the manner in which gold is traded internationally,” the bank’s statement said.

Customers can invest in gold, starting from as low as Dh500, the bank said. Alternatively, they can set up a Systematic Investment Plan (SIP) to buy small units of gold every month in the Gold Investment Account.

This account also offers the facility of transferring the gold balance to another XAU account holder or selling back to the bank.

Krishnamurthy added that the account was “specially designed to enable retail customers to buy gold in electronic form. We have received some very positive initial responses from our customers to this innovative product, and look forward to growing this significantly as people turn to gold as a traditional store of value in the low-interest yielding economic environment.”

The bank said the account was available to both its individual and corporate investors. Individual investors can open a Gold Investment Account instantly through Emirates NBD’s Internet Banking platform. Transactions can then be carried out via an e-banking platform or through the physical branch.

Once customers set up the Gold Investment Account and decide the amount of gold they want to buy, they can transfer the requisite funds for purchase of the gold from their AED or USD account, according to the prevailing gold rate. The account balance statements will be communicated to the account holder in Troy Ounces, the international standard for weighing gold.
 

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