Meaning of "Gold for Gold" in Islamic Transactions

Author: Dr. Muhammad Zia-ur-Rahman Azmi (رحمہ الله)

The meaning of the Prophetic statement:

"Gold for gold, and silver for silver... must be equal and hand to hand."
(Sahih Muslim 1587/81)

This hadith establishes two essential conditions when exchanging gold for gold:

Equality in Weight – The exchanged gold must be of equal weight.
Immediate Exchange – The transaction must be completed hand to hand, meaning possession must be taken before separating.

Example of a Valid Transaction

If a person sells one mithqal of gold (approximately 1.5 dirhams) in exchange for another mithqal of gold, and both parties take possession before leaving the meeting, this transaction is valid as it follows the hadith:
"They must be equal and hand to hand."

Example of an Invalid Transaction

Unequal Exchange – If one person sells 1.5 mithqal of gold in exchange for 1.25 mithqal, it is invalid because equality is not maintained. This is considered Riba al-Fadl (usury due to excess).

Delayed Possession – If one party delivers one mithqal of gold immediately but receives the counterpart after a delay (even for one hour), it is invalid as the exchange must be hand to hand.

Application to Silver Transactions

The same conditions apply when exchanging silver for silver:

Equality in Weight – The silver exchanged must be of equal weight.
Immediate Possession – Both parties must take possession before leaving the meeting.

Conclusion

When exchanging gold for gold or silver for silver, two conditions must be met:
Equal Weight
Immediate Possession in the Same Meeting

This is the clear understanding of the hadith both in its explicit meaning and implied interpretation.

[Ibn Uthaymeen: Noor 'Ala Ad-Darb: 4/235]
 
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