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The City of Gold

By Stansberry Research Interview Series
Monday, May 21, 2007

In medieval times, Arab scholars referred to Ghana as the Kingdom of Gold because of its abundant mines. Today, on the consumer end of things, Dubai holds that title – it's actually one of the emirate's official nicknames.
 
At 31.1 grams per year, Dubai has the highest per capita consumption of gold in the world. Altogether, Dubai exports more than 350 tons of gold a year, making it the second-largest distributor of gold in the world.
 
More than three-quarters of Dubai residents own gold. Some two-thirds of them buy gold at least once a year. We're not talking about cheap trinkets, either: 95% of all jewelry sold is above 21 karats quality. Nothing is below 18 karats.
 
All of these numbers come to life at the famous Gold Souk.
 
Of Dubai's 600 gold shops, nearly half are located in a 0.5 square-kilometer market called the Gold Souk. Try to imagine a two-story mall filled with nothing but gold and jewelry stores. Bracelets, necklaces, earrings, watches... any piece of jewelry you can name is on sale here. At any given time, there are more than 25 tons of gold on display. Yes, tons.
 
I could have used up an entire role of film on pictures like the one above. The shops are an unending maze. I actually got lost at one point. Wooden benches line the streets, and vendors walk between them selling water and Red Bull. Judging from the number of people sitting on the benches watching the passing crowds, gold shopping has become something of a spectator sport in Dubai.
 
The jewelry is sold based on weight more than design. The price varies depending on whether the piece was made by a person or machine. Often times, you can buy at a discount to gold's market value.
 
Outside the Souk's entrance, a digital ticker tape runs all day, detailing the current price of gold and other precious metals. If you buy anything, it's assumed you're going to argue about the price.
 
Many of the shops buy or exchange used gold. You can even have a piece custom made for you. And if you're feeling bold, you can have alloys added to give the gold a pink, white, or green hue.
 
The Gold Souk is open from 10 a.m.-1 p.m. and 4 p.m.-10 p.m. The best time to go is the late afternoon, but even in the morning there's a crowd.
 
Of course, not everyone has the time to fly over to Dubai just to load up on gold. Fortunately – or unfortunately depending on your wallet – most everything the Gold Souk has to offer is now online at www.city-of-gold.com. You can't e-haggle, but you can spend a ton of money without having to endure the 90 degree heat.
 
Good haggling,
 
Graham




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