New Shariah Gold Standard opens up metal to Islamic investors for first time
London (Dec 8) A new Shariah Gold Standard has been approved, making the precious metal a Shariah-compliant investment for the first time.
The landmark agreement in Shariah banking rules was announced by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the World Gold Council this week, following a meeting in November and an extensive period of consultation.
The new Standard shows that investment in gold is permissible for Islamic investors provided that all the relevant Shari’ah rulings are satisfied, including those relating to taking possession of gold and the proper calculation of Zakah.
Dr. Hamed Hasan Merah, Secretary General of AAOIFI, comments: “This all-important Shari’ah Standard culminates substantial efforts exerted by the AAOIFI Shari’ah Board, being the leading and most influential Shari’ah authority across the Islamic finance industry worldwide. It constitutes a new addition to the existing set of AAOIFI’s standards as it covers Shari’ah- compliant mechanisms for dealing and investing in gold in a present-day setting, potentially setting ground for constructing and structuring of new investing products in conformity with Shari’ah rules and precepts, in addition to those relating to liquidity management for Islamic financial institutions. Hopefully, this would represent a progressive stride for the Islamic finance industry.”
The Standard is a game-changer for the alternative investment, opening the precious metal asset to 1.6 billion Muslims around the world – a market that could prompt a surge in gold investment in the coming years.
Aram Shishmanian, CEO of the World Gold Council, comments: “This is a ground breaking initiative for Islamic investors and for the gold industry at large. We are delighted that there is now definitive Shari’ah guidance on the permissibility of investing in gold. Gold is a proven wealth preservation asset that Islamic investors can now deploy to protect their wealth and diversify market risks.”
Source: TheMoveChannel
