5 Important Facts About Gold

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In a time of escalating conflicts, shifting balances of power, and increasing fear of the future, many people have turned to gold as a safe haven to save their money and preserve its value. While this approach is sound, it requires understanding certain aspects to achieve the best possible results. Gold is not just a commodity to be bought; it's a complex process that demands comprehension and knowledge, as it serves as a safe haven not only for individuals and families but for nations and societies as a whole.

This can be understood by referring to a report by the American website "Oilprice," which confirmed that concerns about the ongoing fiscal deficit in the United States and inflationary pressures have driven central banks worldwide to intensify their efforts to accumulate as much gold reserves as possible. This is done to protect reserve assets from a potential decline in the dollar's value and the risks threatening the financial system. If nations and central banks are turning to gold as a safe haven, what about individuals and families? This brings us to highlight the five most important things concerning gold.

1. Gold is an Indicator of Global Events

Gold is intrinsically linked to global events and developments. Therefore, wars, political tensions, and global economic changes directly impact gold prices. When the war between Palestine and the usurping Zionist entity escalated, gold prices rose. When the scope of fighting widened to include other countries like Iran, the price increase unexpectedly doubled. And when the war subsided, confining itself to the genocide of the people of Gaza alone, prices declined again.

Not only that, but gold has become one of the primary indicators through which future global events can be predicted. If prices suddenly increase without actual reasons for this rise, it signifies the imminent emergence of a global event (political or economic). Therefore, gold prices are nothing more than a mirror of current conditions and a true reflection of underlying intentions.

2. Suitable Forms of Gold for Investment

Gold comes in various forms, including bullion, coins, and gold jewelry. Not all of these forms are suitable for investment. While the price of gold is consistent across all forms, the manufacturing cost (or craftsmanship fee) makes the difference. Gold bullion and coins are characterized by their low manufacturing costs, making them most suitable for investment. As for jewelry, it is more suitable for adornment, which is why its manufacturing cost is much higher than that of bullion and coins. Therefore, before buying gold, one must first determine the purpose of the purchase: is it for investment or adornment? Then, the most appropriate decision can be made.

3. Online Gold Trading

Recently, various forms of gold and currency trading have emerged in global financial and electronic markets. Online gold trading has become common, with many people opting for it. This involves monitoring prices moment by moment and purchasing through a specific application without physical possession of the gold. This is considered impermissible and unlawful according to Islamic teachings, as the Prophet Muhammad (peace be upon him) said: "What is hand-to-hand is not a problem, but what is deferred is usury (riba)." "Deferred" here refers to delay or not taking possession at the time of sale. Therefore, whoever wishes to invest in gold must purchase it from designated selling points and take possession of it at the same time of purchase.

4. The Best Time to Buy and Sell

Anyone who has bought gold and wishes to sell it must first ask themselves the purpose of the sale. If it's for profit, there's no need to sell, because gold preserves the value of money. At the same time, an owner might sell at a time they believe is suitable, thinking prices won't increase further and will decline again. However, they might discover after selling that the price has risen. If they buy again at the higher price, they lose. If they don't buy, the value of their money will decrease over time, and they might not be able to preserve it.

Therefore, it's best not to sell gold intended for investment unless it's absolutely necessary. Anything otherwise is a risk that may sometimes succeed and sometimes fail. Furthermore, the most suitable time to buy is when a person has surplus money, as gold preserves the value of this money and its price generally increases in the long term. In general, the appropriate time to buy gold is when prices are stable, and the appropriate time to sell is when prices unexpectedly increase.

5. Zakat on Gold: When and How?

First, we must differentiate between gold for adornment and gold for savings. Gold for adornment is not subject to Zakat. However, gold for savings is subject to Zakat, provided it reaches the nisab (minimum threshold) and a full lunar year has passed. The nisab for gold means the owner possesses the equivalent of 85 grams of pure gold (24 karat). If the amount owned is less than this nisab, no Zakat is due. A full Hijri (lunar) year must also pass for Zakat to become obligatory. The value of Zakat is 2.5% of the value of the saved gold. Allah (SWT) warned those who hoard gold and silver and do not pay their Zakat, as He states: "And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment." (Quran, Surah At-Tawbah: 34).

From this, it becomes clear that gold is among the permissible matters in Islamic Sharia for investment, and it is one of the best ways to preserve the value of money. It serves as a safe haven for individuals and nations, a strong reflection of global events, and a powerful indicator for determining international trends and underlying intentions. There are forms of gold suitable for investment and others for adornment, and purchasing gold without immediate possession is prohibited by Sharia. Finally, Zakat on gold must be paid if it reaches the ‘nisab’ and a full year has passed.