Naked gold shorting
The practise of naked short selling is not permissible as you are selling something which you do not own. Selling something without having ownership is not permissible in Islam. And Allah knows best! (Mufti) Billal Omarjee
Leasing gold for short selling
The practise of leasing gold for short selling on the financial markets is not permissible. Leasing gold to someone who will sell it, is equivalent to lending. The lease payment is like an interest payment. This is the opinion of the scholars among the Hanafis, Malikis, and Hanbalis. (Please note that, leasing gold for personal [...]
Selling gold jewelries on credit for money
The opinions of the scholars can be divided into two categories: It is permissible to sell a gold jewellery on credit, when the jewellery is not considered a medium of exchange. This is the opinion of Mu’awiya (ra), Ibn Arabi, Ibn Taymiyah, Ibn Qudama and contemporary scholars, such as Rafiq Misry in his second opinion, [...]
Methods of trading “allocated gold certificates”
The certificates can be traded in the following three methods: When the transaction and settlement is cleared straight away (T+0) There is no doubt that this method is permissible, as it mentioned by AAOIFI and others. When the transaction is deferred such as in the Forward contracts This method is not permissible. When the transaction [...]
Selling gold through a Repurchase Agreement (Repo)
An investor needs some liquidity from the bank. He approaches the bank and enters into an agreement where the bank will buy £1 million worth of gold today from him. In return, the investor agrees to buy back the gold from the bank in 6-month time for a pre-determined mark-up price. Is this permissible? It [...]
Lending gold in commodity markets
In a commodity market, lending can take place in two forms: A company might lend to another company with the condition that the repayment is inclusive of an interest amount. This method is not permissible. A company might lend to another one without the condition of interest payment. This method can be divided into [...]
Trading gold-backed Sukuk
It is permissible to trade gold-backed sukuk if there is a bilateral exchange at the time of the transaction. The possession of both the sukuk certificate, and the currency, can be constructive rather than physical. For the sukuk, possession can materialise by registering it under the name of the new sukuk holder. For currency, this [...]
A rule related to lending/borrowing in gold
Can you lend gold with the condition that the borrower will return gold, based on the value on the day of lending? For example, A lends to B two gold lingos worth £10,000 in total. On the day B returns the gold lingos, the value of the gold has changed, Now, to make up for [...]
Buying “allocated gold certificates”
We can classify the opinions of the scholars into 2 categories: It is not permissible to purchase allocated gold certificates. Even though the ownership of the gold is established through allocation, the mere certificate does not represent possession. This opinion is based on principles established by a group of traditional scholars. Proof: It is mentioned [...]
Can we buy “unallocated gold”?
It is not permissible to buy unallocated gold or unallocated gold certificates. When buying an unallocated certificate, you are not taking a physical or constructive possession of the gold. There is no physical gold that is being allocated to your name (therefore no real ownership). In fact, the seller might not even have enough gold [...]