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

The Tax Man Cometh! And Not Just for Billionaires

The tax man cometh! And thanks to the Democrats in Congress, there will be more tax enforcers shining their lights into the nooks and crannies of Americans’ finances.

READ MORE →

Fed Balance Sheet Reduction Not Delivering as Promised

The Federal Reserve is all-in on the inflation fight. Or is it? While everybody focuses on interest rate cuts, the promised Fed balance sheet reduction isn’t going quite as promised.

READ MORE →

Record Consumer Debt Levels Continue to Climb

Consumers continue to add to their record level of debt as higher prices squeeze wallets. Americans added another $40.1 billion to the debt load in June, according to the latest data from the Federal Reserve. That represents a 10.5% year-on-year increase.

READ MORE →

Central Banks Added Gold at Faster Pace in June

Central bank gold buying notched up again in June. Central banks globally added 59 tons of gold to their reserves last month and there were no reported sales, according to the latest data compiled by the World Gold Council.

READ MORE →

Labor Market Showing Cracks as Job Openings Decline More Than Expected

Despite back-to-back contractions in GDP, President Joe Biden, Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and all of their supporters in the corporate media insist the US economy isn’t in a recession. But the only data they ever point to in order to back up their assertion is the “strong” labor market. The problem […]

READ MORE →

Comments are closed.

Call Now