Laws of Gold Trading in Islam – Obligations
Gold is a precious commodity that used for trading since a long time ago. In fact, gold has been used as a valid payment in trading too. Islam itself has already give the best guidance about gold trading in order to avoid people who involved in the commerce will not fall into the dangers of usury which is not good for both in life and afterlife. In this occasion, we will thoroughly review about gold trading in Islam’s view. Read more about Prohibition of Raising Dogs Islam
As it stated previously, the guidance of gold trading is implied on Ubadah bin Shamit hadith. He is mentioned about Rasulullah sallallahu ‘alaihi wa’sallam statement which said, “Gold with gold, silver with silver, burr with burr, lyric with lyric, tamr with tamr, salt with salt, it must have the same value and it must be done in hands to hands (which mean cash). If they have different types, then you can trade them as you wish as long as it is also to be done in hands to hands (cash).” [HR. Al-Bukhari Muslim No. 1587].
Rules of Allowed Gold Trading in Islam
As a perfect substation in Islam, Islam allows people to do trading by ordering selected goods as it requested with cash as the valid payment. It is because of the transaction which is made by both parties is have mutual advantages without any fraud contained on it or ghoror. Here are some of advantages of become buyer:
- A guarantee to get the suitable goods as requested in certain time.
- Gets a cheaper price compare to purchase the good when it’s needed.
Meanwhile, seller is also getting the similar advantages as if as buyer. The advantages are:
- Getting a halal capital to running the business and the opportunity to expand the business without worry of paying interest. Read more about Dua in the Morning in Islam
- Seller has a freedom to fulfill and arrange the buyer’s demand in a certain time among the transaction time and the delivery time.
As it stated in the basic laws of Islam, the validity of gold trading is determined by the pillars and its provisions. Here are the explanation related to the pillars and the provisions as below:
- The Pillars of Islam
The pillar of Islam is the importance function which must be applied in the transaction process as below:
- Aqid (a performer who implemented the transaction as it is also called a moslem or Ilaihi moslem).
- Ma’qud ilaihi which means transaction’s object. It can be assumed as a commodity period and also exchange rates [a’s al-mal al-salam and al-moslem fiqh]. Read more about 6 Pillars of Islam
Some provisions that are considered as completer in the transaction are as below statement, “If there are two people having transaction which means trading, thus, each other has both of them have Khiyar’s rights (vote to choose) for each person, as long as the trading is not settle yet, and they are still together( were in the same assembly).” [Muttafaqun ‘alaih]
One of Islam Shiri’a that has purpose to avoid people do rush in trading is by restricted the gold trading in Islam commerce and silver. Islam is very strict to maintain both statuses as tools of transaction in order to maintain the performance of the commerce and also to stabilize the human commerce. Read more about Importance of Faith in Islam
Islam Shiri’a also gives a freedom for gold or silver to be traded in to another good with has the same value or under based on below provisions:
- If the goods must be traded in to another good, it must have similar value as like as gold with gold, silver with silver. The exchanged goods should have the same weight though it has different quality. Read more about Importance of Judiciary in Islam
- The trading process must be done in cash, thus after both parties signed the agreement and continued with proper handover like gold with gold, silver with silver or money, it must be settled directly without postponed .
Those pillars are taken based on Rasulullah sallallahu ‘alaihi wa’sallam decreed, “Do not replace gold with gold unless it has the same value and do not exaggerate it one into another. Do not replace silver with silver unless it has the same value and do not exaggerate it into another. Do not sell one of them in cash while the other was sold with another payment.” [HR. Bukhari and Moslem].
The provisions of gold trading in Islam are having been arranged since 14th century and it is relevant until the end of time. It also can be customized with the current situation changed. However, it should be noticed that laws of trading in Islam which is online gold trading, needs more attention especially about the payment method.
It has to be cleared whether the transaction will be paid in cash, which is when the customer received the goods directly when the transaction is still on process or indirectly. If the payment will not be given in cash, then gold trading via online is forbids. Read more about Benefits of Equality in Islam
Syaikh Sholeh al Munajjid explained that gold trading via internet is not allowed as it said in Islam Shari’a because we are not receive the goods directly but we done the transaction by transferred the payment first via internet banking then a few days ahead we received the goods. It is forbidden as it stated on source of Islam Shari’a.
Gold trading via online is considered as Usury because the buyer makes the transaction through a gold or dinnar website and settle the payment in cash by internet banking or credit card. After all transaction is clear, then seller will send the gold to the buyer in a certain time.
That activity is considered as ba’i usury as it is included in types of Riba. It is because gold and cash is equals. In addition, the handover of the goods and the payment are not cash, means that the seller is already received the payment while the buyer has to wait to receive the goods in a certain time. Read more about Importance of Etiquette in Islam
Therefore, gold trading in Islam is allowed as long as the payment is done in cash. The value and the amount of the goods can have differences but it must have the same measurement into another. Hopefully, this article can give you more information about gold trading in Islam.