Is It Permissible To Buy Gold And Resell For Profit?

Answered by Shaykh Muhammad Carr

Question

Is it permissible to purchase gold and later resell it at a higher price for profit?

Answer

In the Name of Allah, the Most Merciful and Compassionate.

May Allah reward you for ensuring that your transactions comply with Islamic Contract Law.

The purchase of gold and its subsequent resale at a higher price for profit is permissible, provided that the conditions related to usurious transactions are fulfilled.

Buying and Selling Gold

The Prophet (Allah bless him and give him peace) said:

“Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt – like for like, equal for equal, and hand-to-hand; if the commodities differ, then you may sell as you wish, provided that the exchange is hand-to-hand.” [Muslim, Tirmidhi]

Thus, if gold is exchanged for silver (or another currency), their amounts may differ, but the following conditions are obligatory:

1. The exchange must be immediate, and
2. The properties exchanged must be in the respective possession of the buyer and seller before they part company. [Misri, ‘Umda al-Salik]

I pray this is of benefit and that Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefited from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.