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

Silver Breaks Above $28 an Ounce

The price of silver broke above $28 an ounce Thursday morning. In the last 30 days, silver has gone up by nearly 54%. On the year, the white metal is up over 71%. Even with these big gains, silver remains historically undervalued compared to gold.

READ MORE →

Fed Commitment to Let Inflation Run Isn’t a Promise; It’s a Threat

According to a recent CNBC report, the Federal Reserve is set to make a major commitment to “ramping up inflation.” According to the report, the Fed will pivot to “average inflation targeting.” With this strategy “inflation above the central bank’s usual 2% target would be tolerated and even desired.”

READ MORE →

Americans Currently Owe More Than $21 Billion in Back Rent

Most people remain blissfully ignorant of the economic wounds inflicted on the US economy by the government-imposed economic shutdowns in response to the coronavirus. But every once in a while, the curtain blows back and we catch a glimpse of the damage. For example, a report released last week by global advisory firm Stout, Risius […]

READ MORE →

$2,000 Gold!

Gold pushed above $2,000 an ounce for the first time ever on Tuesday. The spot price broke through $2,000 a little after noon and then immediately sold off over the next 10 or 15 minutes. In a tweet, Peter Schiff said, “You know the gold bull has a long way to run when the first […]

READ MORE →

Despite Big July Gains Silver Still Historically Undervalued

Silver futures were up 25% in July, the second-biggest monthly gain for the white metal on record. And silver is still significantly undervalued compared to gold.

READ MORE →

Comments are closed.

Call Now