Gold and Silver Trading
Online and spot gold trading platforms
Gold trading is permissible only in spot transactions with immediate possession (qabd). Online gold trading platforms that defer actual delivery or sell unallocated gold (not specifically identifiable) risk falling into riba al-fadl (usury in exchange of ribawi goods).
Accounting and Auditing Organisation for Islamic Financial Institutions
Full Ruling
Gold and silver are ribawi commodities (thaman haqiqi) subject to the rule: 'Gold for gold, silver for silver — like for like, equal for equal, hand to hand.' Trading gold requires: (1) Immediate exchange (simultaneity of possession) — no deferred delivery. (2) Equality of weight if same metal is exchanged. (3) Actual possession (qabd haqiqi or qabd hukmi) must occur at contract inception. Online platforms that issue 'certificates' backed by unallocated pool gold without specific assignment to the buyer violate the qabd requirement.
Rationale & Reasoning
The Prophet's hadith establishes gold and silver as ribawi commodities where deferred exchange constitutes riba al-nasi'ah (riba through delay). Even equal-weight deferred gold exchange is prohibited. Modern allocated gold accounts satisfy qabd through constructive (hukmi) possession — the gold is specifically identified and legally owned even if not physically held.
Rule Basis (Daleel)
- 01Hadith on sarf (exchange of ribawi commodities)
- 02Ribawi commodity rules for gold/silver
- 03AAOIFI SS-18 on qabd (possession)
Conditions for Permissibility
- ✓Immediate exchange — no deferral of either side
- ✓Physical or constructive possession (qabd) at time of contract
- ✓Allocated gold (specifically identified), not pool/unallocated gold
Citations & Sources
AAOIFI Shariah Standard No. 18 – Possession (Qabd)
AAOIFI · 2002
Ref: SS-18