❀ Islamic Guidance on Buying and Selling Gold ❀
Source:
This article is derived from the book 500 Questions and Answers for Women, based on the Fatwas of the scholars of the Haramain. The translation was done by Hafiz Abdullah Saleem.
What is the Islamic ruling regarding a common practice in the gold trade, where dealers purchase used gold and then exchange it with the goldsmith for newly prepared gold of equal weight, only paying the fee for crafting?
The Prophet ﷺ clearly stated in an authentic Hadith:
"الذھب بالذھب والفضة بالفضة والبر بالبر والشعير بالشعير والتمر بالتمر والملح بالملح، مثلا بمثل، سواء بسواء، يدا بيد"
[Narrated by Muslim, Book of Transactions, 81]
"Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt — must be exchanged equal for equal, hand to hand."
Furthermore, the Prophet ﷺ said:
"من زاد أو استزاد فقد أربى إلا ما اختلفت ألوانه"
[Same source, Hadith 83]
"Whoever gives more or takes more has engaged in riba (usury), unless the items exchanged differ in kind."
When the Prophet ﷺ was presented with high-quality dates, he inquired about them. The people replied that they had exchanged one measure of these for two of lesser quality. The Prophet ﷺ forbade this and prohibited such unequal exchanges, even in kind.
Therefore, in the case where:
✔ Used gold is exchanged for
✔ Newly crafted gold of equal weight,
✔ And only a fee for craftsmanship is paid —
This practice still requires caution. The transaction may involve an indirect form of riba if it includes:
✘ A delayed exchange,
✘ Or if the new gold is not exactly equal in weight to the used gold,
✘ Or if the payment of craftsmanship fee is linked with the value of the new gold rather than the service alone.
To avoid riba, the proper method is:
① Sell the used gold separately for cash,
② Then purchase the new gold in a separate, independent transaction.
This ensures compliance with the conditions of hand-to-hand and equal exchange as taught by the Prophet ﷺ.
[Shaykh Muhammad bin Salih al-‘Uthaymeen رحمه الله]
Source:
This article is derived from the book 500 Questions and Answers for Women, based on the Fatwas of the scholars of the Haramain. The translation was done by Hafiz Abdullah Saleem.
❖ Question:
What is the Islamic ruling regarding a common practice in the gold trade, where dealers purchase used gold and then exchange it with the goldsmith for newly prepared gold of equal weight, only paying the fee for crafting?
❖ Answer:
The Prophet ﷺ clearly stated in an authentic Hadith:
"الذھب بالذھب والفضة بالفضة والبر بالبر والشعير بالشعير والتمر بالتمر والملح بالملح، مثلا بمثل، سواء بسواء، يدا بيد"
[Narrated by Muslim, Book of Transactions, 81]
"Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt — must be exchanged equal for equal, hand to hand."
Furthermore, the Prophet ﷺ said:
"من زاد أو استزاد فقد أربى إلا ما اختلفت ألوانه"
[Same source, Hadith 83]
"Whoever gives more or takes more has engaged in riba (usury), unless the items exchanged differ in kind."
When the Prophet ﷺ was presented with high-quality dates, he inquired about them. The people replied that they had exchanged one measure of these for two of lesser quality. The Prophet ﷺ forbade this and prohibited such unequal exchanges, even in kind.
❖ Application to Gold Trade:
Therefore, in the case where:
✔ Used gold is exchanged for
✔ Newly crafted gold of equal weight,
✔ And only a fee for craftsmanship is paid —
This practice still requires caution. The transaction may involve an indirect form of riba if it includes:
✘ A delayed exchange,
✘ Or if the new gold is not exactly equal in weight to the used gold,
✘ Or if the payment of craftsmanship fee is linked with the value of the new gold rather than the service alone.
To avoid riba, the proper method is:
① Sell the used gold separately for cash,
② Then purchase the new gold in a separate, independent transaction.
This ensures compliance with the conditions of hand-to-hand and equal exchange as taught by the Prophet ﷺ.
[Shaykh Muhammad bin Salih al-‘Uthaymeen رحمه الله]
