Bas Kooijman, CEO and Asset Manager of DHF Capital S.A., cites that the price of gold rose 5.4% in the first half of 2023 and it could rise above 10-15% through the rest of the year; if this projection is realized, gold prices would rise by nearly AED 734 per ounce or approximately AED 50 per gram. Kooijman shares insights on the market’s upward trajectory and why UAE residents can invest with confidence.
As it pertains to gold consumption, the UAE has consistently ranked among global leaders; the country purchased 11.5 tonnes in the last quarter of 2019, the fourth-most in the world, as well as the most in the Middle East. At the height of the pandemic in 2020, the UAE’s average gold intake was recorded at 39.8 tonnes to solidify its regional leadership and its per capita gold consumption was the second highest across the globe at 5.24 grams.
The uncertainty of COVID-19 drove gold globally to new record levels with prices reaching a historic high of $2,067.15 (nearly AED 7,600) per ounce in August 2020. This bull run cooled down significantly to $1,519 per ounce at the start of 2021 and provided negative returns through the rest of the year. In 2022, the market saw a similar trend with gold prices reaching a peak of $2,072 per ounce in March and then another low of $1,613 per ounce in September.
In 2023, industry experts have seen renewed strength in the gold sector. This optimism was observed in the UAE with gold reserves for the Central Bank of the UAE (CBUAE) rising 9% through the first four months of this year, equating to $397 million (AED 1.46 billion). Additionally, the CBUAE’s gold reserves showed 41% Year-over-Year growth during this same period, a $17.5 billion (AED 64.2 billion) increase; this is a significant jump from the $3.5 billion (AED 12.855 trillion) evaluation that was logged in December 2022.
Kooijman commented: “The CBUAE’s growth over past years reinforces the strength of gold as an investment; reserves were valued at over AED 1 billion in 2018, and the most recent data on record indicates that it is now inching towards reaching AED 20 billion in the near future. With its proven value through history, and industry analysis displaying a positive outlook, residents with disposable income should look to invest in this precious metal as it is known to be a safe bet for hedging against inflation and maintaining its value throughout market fluctuations.”
World Gold Council data shows that the UAE purchased 9.7 tonnes of gold in the first quarter of this year. With some countries beginning to ban emerging assets such as digital currencies, gold remains resilient and a safe investment option. Bas’ securitization firm, DHF Capital, provides gold trading as a service, among other tools to help regional and global investors reap profits. With Bas at the helm, DHF has provided an annual average ROI of 20% since its inception and investors who have worked with him since the company’s inception have witnessed a 114% ROI to more than double their initial investment.