Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Gold Prices Expected to Move Up With Sharia Law Revisions

  by    0   2

Since it was first proposed last April, trading gold as a commodity within Islamic finance is now a reality. The pro-gold law was first adopted on November 19 by the Accounting and Auditing Organization for Islamic Financial Institutions, which sets Sharia Law standards for finance groups.

Historically, Islamic investments have been guided by Sharia Law, which prohibits financial practices like earning and paying interest on loans. It also outlines requirements for the exchange of commodities like gold and silver. Islamic law sees gold as a substance sold by its weight and measures; a commodity that must be immediately exchanged in equal amounts. These types of substances are called Ribawi, and traditionally include silver, dates, wheat, salt, and barley. Therefore, the idea of using precious metals as an investment vehicle or as wealth retention is new.
mosque

The new revisions to Islamic financial guidelines have the enormous potential to impact world gold demand and prices, given that 1.6 billion Muslims will now be allowed to trade in precious metals. Gold bullion investments will be opened up to 25% of the world’s population, with the Islamic finance market expanded to “grow to US$5 trillion by 2020,” according to ZeroHedge.

Exchange traded funds that are backed by gold are expected to qualify for the new guidelines, while gold futures probably won’t, according to Bloomberg. Physical gold bars and coins may also qualify, according to Natalie Dempster, a managing director of the World Gold Council. However, the rules require that a bank selling gold has to “offer same-day settlement or has to demonstrate it can provide the exact gold being sold within one day,” Dempster said. This standard is expected to also apply to silver.

Gold now joins equities, real estate, Islamic bonds, and insurance as vehicles approved for finance.

“This is a ground-breaking initiative for Islamic investors and for the gold industry at large,” said Aram Shishmanian, chief executive officer of the World Gold Council. “We are delighted that there is now definitive Shariah guidance on the permissibility of investing in gold.”

Whether you’re of the Islamic faith or not, buying gold and silver is a proven effective way to diversify your portfolio while simultaneously preserving your wealth.

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

China’s Gold Market Continues to Recover

Chinese gold imports have nearly returned to pre-pandemic levels and the world’s biggest gold market continues to recover. According to the latest data reported by the World Gold Council, China imported 67.6 tons of gold in May. That was 65 tons higher than May 2020 and only three tons lower than May 2019, before the […]

READ MORE →

US Government Spending Sure Isn’t Transitory

The mainstream narrative is that the Fed will soon admit that inflation isn’t transitory. At that point, it will raise interest rates and taper its bond-buying program to fight rising prices. But this narrative ignores the elephant in the room – the ever-increasing national debt. In June, the US government ran another big deficit of […]

READ MORE →

“Transitory” Inflation Comes in Hotter Than Expect. Again.

For the sixth month in a row, Consumer Price Index (CPI) data came in much higher than expected. But the question remains: how long will the Fed keep up the “transitory” inflation narrative? And when they do abandon this storyline and acknowledge inflation, what can the central bankers really do about it? The CPI surged […]

READ MORE →

Many Indians Depend on Gold to Stay Afloat During Pandemic

Gold has served as a lifeline for Indians pummeled by the economic storm caused by the government response to the coronavirus pandemic. The Indian government’s response to the first wave of COVID-19 ravaged the economy. As a result, many banks were reluctant to extend credit due to fear of defaults. In this tight lending environment, […]

READ MORE →

Stimulus Checks Run Out; Americans Whip Out Their Credit Cards

What do you do when that stimulus money runs out? You whip out the credit card. Consumer debt was up 10% in May, according to the latest data from the Federal Reserve, and we saw a big jump in credit card balances for the first time since February 2020.

READ MORE →

Comments are closed.

Call Now