Is Online Gold Trading Without Leverage and Interest Permissible?
Answered by Shaykh Muhammad Carr
Question
Is it permissible to engage in online gold trading with leverage if no interest is involved?
Answer
May Allah reward you for ensuring that your income is permissible.
Online gold trading is generally considered impermissible, even in the absence of leverage and interest.
The problem with the validity of online gold trading is it lacks ownership of the gold, and no actual or constructive exchange of gold and its counter value takes place.
If gold is exchanged for silver (or another currency), their amounts may differ, but the following conditions are obligatory:
(a) that the exchange be immediate;
(b) and that the properties exchanged must be in the respective possession of the buyer and seller before they part company. [Misri, ʿUmda Al-Salik]
For more on the rules of money commodity exchange (sarf) please click Can I Buy Gold or Silver Online?
I pray this is of benefit and Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Mohammad Abu Bakr Badhib
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 benefitted 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 for 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’ah Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.
