Trading requires a significant amount of trust between both parties behind the transaction. Each deal made builds up not only the reputation of a company but also the pool of customers that it can serve. With the bullion market dealing in such large sums of capital, it’s difficult to trust your money with just any company.
Rakesh Rajdev, an experienced businessman in the commodities scene, has sought to provide clients with a professional and transparent trading experience through APM Bullion. However, understanding the way that bullion is traded and valued can be beneficial when drawing up your investment plans.
Here, we’ll talk about the niche that gold bullion plays within the commodities and how it’s traded by different entities across the globe. Along with that, we’ll also look into Dubai and its place as a central gold hub in the Middle East. Gold Bullion in Dubai is sought after by all sorts of investors so let APM Bullion help you to obtain your piece of the market.
Knowing The Niche Bullion Plays In Investment Strategy
Delving into bullion trading requires the investor to know exactly what they’re dipping into. For the sake of commonality, bullion can be classified as physical products of gold and silver. When companies and banks talk about bullion, they tend to be referring to precious metals in the form of ingots and bars. Coins made from precious metals are also classified as bullion and legal tender.
Typically, bullion is traded by central banks to shore up reserves. These are then used for lending and debt payment owing to the flexible nature of bullion. It may also be used in other trading activities such as hedging, the process of investing with the intent to protect yourself from adverse market conditions.
How Bullion Trading Works
Bullion Trading and the process behind it changes depending on who the seller is. For central banks, the process involves lending a specific amount of gold to bullion banks in exchange for its equivalent value in cash for a specific loan period. From there, the gold borrowed tends to reach market circulation by being sold or by being lent to different companies.
It may seem counter intuitive to sell borrowed gold. The bullion bank’s reasoning for this is that they’re betting on the price of the gold they sold being lower so that they can buy it back for lower prices. After the bank’s loan period passes, they buy the gold on the spot market and return it all to the central bank they received their gold from.
Investors And The Bullion Market
Aside from larger entities trading bullion, investors and smaller entities tend to trade on the Bullion Market. Here, gold is traded for market value which is influenced by industrial demand and other aspects. As of late, economic insecurities have also fueled the price of gold and its positive growth.
Economists tend to trust gold as a “safe-haven” investment due to its historical price stability. With it steadily rising over the past years, more investors are looking to hold positions in gold for long-term safety. Physical Gold tends to be preferred for that purpose as alternative gold products, such as ETFs and Futures Contracts, are typically more volatile.
Alternatively, one could sell bullion and liquidate it for cash whenever they need to. For sellers, the market tends to be favorable to the holder when dealing with bullion dealers known for transparency and honesty. For bullion that you’ve purchased from the same company, you may find that they’ll only discount the price minimally. Bullion purchased from other bullion companies may be discounted at a higher rate for a multitude of factors.
Dubai’s Reputation As A Center For Gold Trade
Although the global gold market is interconnected, you’ll find that local markets are just as important to maintain its stability and health. The London Bullion Market Association, a leading organization in the precious metal market, identifies several countries as having a major gold trading center. One of which is the UAE, which is now at the center of issues regarding sustainability and ethics.
As a large hub for gold bullion exports, the UAE has more than its fair share of gold smuggling cases from Africa. Due to this, the state has looked into initiatives to further regulate the flow of smuggled gold bullion in Dubai. As 2023 begins, we’re hoping to see more being done to address the issue and give Dubai the proper platform it deserves as a central hub for global gold trade.
Sourcing Gold Bullion In Dubai From Reputable Bullion Dealers
Sourcing quality gold bullion becomes much easier when you’re dealing with a firm that can back up its reputation. APM Bullion has what it takes to be your premier dealer of gold bullion in Dubai. Through the work started by our founder, Rakesh Rajdev, we’ve aimed towards a company that can serve our client’s needs when it comes to Bullion investment.
Visit our website for more information on all the gold and silver bullion products that we can offer such as our 1kg Gold Emirates Gold Bar. Contact us and see how we can help you to get the right products for you and your investment goals.