Ethica Institute of Islamic Finance™

What is the Shariah ruling in regard to the purchase, storage and possession of gold when prices are low and its sale and delivery when prices rise?

Also what is the Shariah perspective with respect to the promise to purchase and sell gold at

Trade in gold is in and of itself lawful and it is imperative that execution be at spot. The purchase, receipt and storage of gold when prices are low followed by sale and delivery when prices rise is permissible provided the buyer receives the gold and the seller receives the price at the time the transaction takes place.

If a promise to buy and a promise to sell are both made at the same time and place, the goods are agreed upon with respect to their description in detail, their quantity and the date of their receipt in case of a purchase, or their delivery in case of a sale, the promise is considered completed.

If the promise is carried out by means of both parties initiating a new contract of sale such that the buyer receives the gold and the seller receives the selling price at the same time and place, then this transaction will be sound and lawful however if the receipt by one of the two parties to the transaction is delayed until after the other, the transaction will be unsound even if both parties agree.

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