A) The transaction of purchasing or selling the gold takes place on a spot basis and the countervalues are exchanged on a spot basis.
B) The gold being traded in is marked clearly so that it is known which gold is being purchased and is held on behalf of the buyer.
C) If the gold is sold by the company itself or is being purchased by they themselves and they are not purchasing from a third party nor selling to a third party, then the company may not charge a commission. The company may, however, charge a fee from the owner of the gold, for keeping the gold in safekeeping.
D) The company cannot act as a buyer and seller in a single transaction. i.e. If the company is holding the gold they and they were told to purchase they cannot purchase their own gold on your behalf. Similarly if they were holding your gold and are instructed to sell, they cannot sell on your behalf to themselves as in both these instances they would be both buyers and sellers in the same transaction.
E) In the case where the company provides an interest free loan for the prchase of gold, the administrative costs must not be more than in the instance where the company does not provide an interest free loan.
These are some basic conditions for the validity of the contract. It is not possible for us to comment regarding the precise transaction of the specific company without studying their terms and conditions. It is also preferred that companies that trade in this manner seek the guidance of reliable Sharia scholars and adhere to their guidance.
And Allah Ta’ala Knows Best
Shafiq Jakhura (Mufti)
Fatwa Dept.