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Trading in gold online

Answered as per Hanafi Fiqh by Muftionline.co.za

Q: I have question regarding to some gold online business trading. Trading is without any interest. If I open an account with some money, I will buy gold which is online market rate. Gold rates are linked with the real gold rates which are currently internationally. In the beginning I have to decide how much risk (profit or loss) I can take in the business. Depending on that I can get profit or loss percentage, risk can be 30 %, 50 % or 100 %. When I buy gold from my money, I buy a lot of gold and then this gold does not exist physically. What it means is the gold purchased is from the money and if I want to sell that gold, I can get my money back of same gold worth (not the gold), to my account. It could be profit or loss. In other words, gold I purchase from money and I get my money back but in real gold is not existing but the gold price is linked with money.

Here is more detail about that business: In online trading of gold you are using modern way of trading where you don’t have to go market and do buying and selling. You just open your laptop connect your self to the international market. In an international market all over the world buyers and sellers are sitting. No one knows each other. All buyers and sellers they use their knowledge. Some do gambling and some do buying and selling without any knowledge or with analysis/study of market. Now if you have right knowledge right technical and fundamental analysis and you use patience and do money management and risk management then you are successful in making more profits than looses. Means looses gets minimized due to money management and risk management skills. You see prices of gold keep on fluctuating every minutes. You see 5 min charts, 15 mins charts, 30 mins charts, hourly, 4 hours, weekly and monthly charts then you analyze trend and put your trades with calculation of upper limit range n lower limit range according to your capital size. You see macd indicators..stoch indicators..resistance support indicators..moving price averages 5 day moving average, 10 day moving average, 50 day moving average, 100 day moving average, 200 day moving average and these averages keep on changing in every hour, every day, every week and every month. World events and financial news , demand and supply keep changing the prices. And its a vast vast knowledge. Then their comes candlesticks patterns, Japanese candlesticks, analyzers shadows. These all are kind of subjects. After using all these combinations of all these subjects before placing trade and then placing my upper limit to take profit and lower limit to take loss which is basically risk percentage of whole amount. Please guide me accordingly if it is Halal or not with proof and reasons.

Bismillaah

A: When dealing in gold, the sale has to be a cash sale and possession of the exchange is necessary. From what we have understood, this is not found in your situation. Hence, it will not be permissible.

And Allah Ta’ala (الله تعالى) knows best.

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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