Two gold bars costing Dh935 from the Gold to Go machine in the Emirates Palace hotel may impress some but not the shopkeepers of Abu Dhabi who would still rather deal in old-fashioned cash.
Shopping with gold is not recommended
ABU DHABI // The value of gold, it seems, depends on where the holder is. At a grand hotel in the capital, it had clear cash value. At a fast-food restaurant, it was only worth a few astonished stares. At one of the city's carpet sellers, it bought peals of laughter.
Only at the city's gold souq was it treated as a real commodity and shop keepers clamoured to offer their "best price" for a few grams. The traded price of gold fell nearly all day yesterday, according to market reports, then started rising later in the evening. But it became apparent throughout the city that, to some, it was worth nothing at all. It is best left as an investment, stored away in a deposit box, or, given people's fascination with gold, can it serve as currency? This is what happens when a full wallet is replaced with two bite-sized pieces of gold:
12.42pm: Gold to Go ATM, Emirates Palace: The purchase of two gold bars - 1g and 5g - cost Dh935 (US$254.54). It is obvious that gold's value is in its glittery allure: tourists continue to throng the machine to buy, pose alongside for photographs or just peer inside to see what is on offer. "Gold is not cash," said Pradeep Unni, a gold analyst with the Richcomm Global Services, a Dubai-based company. "And getting cash for gold is not difficult. It depends on the quality but only gold jewellers will give cash."
1.15pm: Al Romaizan Jewellery, Marina Mall: The jewellers here are surprised at the quality of the gold bars. Although they offer cash first, they insist the metal is best bartered for as a piece of jewellery. A pendant or a ring, perhaps. "It is fine gold," said Abdullah al Yaffeay, one of the owners of the shop. "Good quality, of course, and with this you can buy whatever you want." Mr al Yaffeay and his brothers have heard of the gold ATM in Emirates Palace hotel. They curiously inspected the bars' boxes as well as the gold and approved of the fact that the bars are stamped by a German company. That establishes they are 24-carat.
Their best offer: Dh870 worth of gold products from their store, but that will include a "making charge". A 4.5g white and yellow gold pendant is offered, as is a large gold ring that weighs 5.5g but is not embellished. "This is a big design, but very light because the price of gold is rising, so a lot of people still want big pieces with design but we have to make it very light now, and keep the old price," said Mr al Yaffeay. In other words, in this transaction, the loss would amount to 0.5g of gold.
1.20pm: National Bank of Abu Dhabi, Marina Mall: A brief stopover at a bank's branch determines that gold can neither be deposited nor exchanged for cash. Perhaps try a main branch of a bank, the cashier suggests. 1.37pm: Plug-Ins electronic store, Marina Mall: El Sayed Mousa, the store manager, said that Plug-Ins purchases can be made in cash, credit cards or cheques, but that the store prefers cash. He is curious, however, to inspect the gold bars. He hasn't heard of the gold machine and is impressed by the gold's quality.
"But if you want to buy something here, you must liquidate it first, then come back to buy something," he said. "In the electronics market, that will not go far," he added after learning of the gold's cash value. "Maybe some speakers and a digital frame." He points to a 55-inch, flat-screen, plasma television to make his point. It costs Dh13,000 and is not even the most expensive product in his store. The gold bars, if liquidated, will buy a 16GB iPod, a mid-range digital camera with limited capabilities or a shiny, mobile phone.
2.21pm, McDonald's drive-through, the Corniche: The most expensive item on the menu costs Dh66. Even parting with one gram of gold should bring 50 of these meals, with some change to spare for a few ice creams. But the drive-through staff are baffled by the gold. The manager insists that all transactions for fast food at the franchise must be cash only.
3.09pm: Emirates NBD bank, Al Muhairy Shopping Centre: The cashier informs us that such transactions may take place in "India or Sri Lanka" but not in the UAE. 4.17pm: Persian Carpet House and Antiques, Abu Dhabi Mall: "What did you say? You want to pay gold to buy a carpet?" said Jashim Uddin, 32, a sales representative. "Absolutely not. You are making me laugh. This is the first time I have every heard of such a request in my 10 years as a carpet salesman. But if you give me that cash, you can buy something cheap."
Mr Uddin produces two carpets, one from India and another from Pakistan. They are woven with silk, cotton and wool. His best carpets come from Iran and are made of silk. The mixed media start at Dh1,500. However, he offers a tiny token of a silk Iranian carpet the size of two mouse pads - but only if the gold is converted to cash. His parting words: "Even after you leave, I will be laughing at you."
5.02pm: Various shops, Madinat Zayed Gold Shopping Centre: The chain stores, such as Damas, will not give cash in exchange for the gold bars, only jewellery. The prettiest comes in the form of a heart pendant with engraved mother-of-pearl. It is made of 3.5g of gold and decorated with four encased hearts with semi-precious stones, including one that contains 0.11 carat diamonds. After visiting more than a dozen shops, several suggest looking for those that advertise "purchasing gold". The lowest offer received was Dh829. The best bid was Dh840.
That meant a loss of Dh95. "We usually see Belgian [gold] here," said Hamed Ghomi, of Al Ansari Jewellery, who made one of the best offers. "This is the first time I have seen German gold." 7.39pm Conclusion: A Gold To Go bar is best kept as a souvenir. firstname.lastname@example.org