Is gold really forever?

By Captain Mahmood Al Mahmood

The news that Bahrainis and Arab nationals are increasingly investing in gold as a better savings option than real estate or other more common investment instruments, is a balm to the wounds of the jewellery industry in the Kingdom which suffered pretty badly in the early pandemic months.

It reminds me of the pattern of saving in gold through jewellery which is prevalent in the Indian subcontinent. Indians are among the largest customers of yellow metal, buying close to 600 tonnes of gold in 2021, up from 450 tonnes in 2020.

Bahrain has strict gold purity standard sand every single piece of jewellery made in the Kingdom is stamped by t h e Assay office – over 9.9 tonnes of gold jewellery was hallmarked in 2021 in Bahrain, making that year the highest on record. This attracts expats and Bahrainis to invest in gold jewellery since they are guaranteed of purity and resale.

But while I am very happy for Bahrain’s famed jewellers, I must ask you all to ponder the question – in the long term, are we locking up our resources?

I know that in India, “gold financing” is a big thing and many families are taking their family jewels to companies that will give them cash against it for urgent needs or even long term plans like a child’s education. Call me old-fashioned but I believe that we should invest more in intangibles as a bulwark against the ups and downs of the future – such as children’s future and proper healthcare.

If we do that then the future of our Kingdom and our children’s world will find its own level. By all means, buy gold jewellery – but do so for their artistic value and sentimental charm and not in anticipation of a time when you will be forced to sell it.