What are the rules regarding buying and selling gold and silver. Is it permissible to buy gold jewelry in instalments, e.g. May I buy a gold necklace costing £100 by paying £50 now and £50 at a later date?
Sheikh Râshid Hamad al-`Alawî, professor at al-Imâm University , al-Qasîm Branch
Gold cannot be sold for a different quantity of gold. Silver cannot be exchanged for a different quantity of silver. The Prophet (peace be upon him) said: “Gold for gold, silver for silver, like for like, hand to hand, and whoever increases or ask for increasing he falls in usury” [Sahîh Muslim]
Though gold and silver are both monetary instruments, they may be freely purchased with other monetary instruments. Gold may be purchased for silver. Silver may be purchased with gold. Both of these precious metals may be purchased with paper currency.
However, purchasing gold and silver with other monetary instruments on a credit basis is a matter of disagreement. The majority of scholars have ruled that it is unlawful to buy gold in installments while a few scholars have considered it lawful. I hold the opinion that it is better to follow the first ruling to be on the safe side. The reason for being unlawful is that the presenting and collecting of the value of the gold do not take place in the same session. It is not “hand to hand”.
The same thing applies to using credit cards to buy gold, since collecting the required amount on behalf of both parties does not take place at the same time. However, if the seller could receive the cash value of his gold product immediately upon the customer’s purchase with his credit card, then the transaction will be lawful.
Source: Islam Today
-- Al Arabiya Digital