An organisation that provides standards on Islamic finance has issued a set of rulings for investment in gold and gold-backed products.
The rulings by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOFII) are hoped to trigger development of gold-based investment instruments that are compliant with Islamic law, known as the sharia. Formerly gold has been treated as currency in Islamic finance, which limited its use.
Hamed Hasan Merah, AAOFII secretary general, says the gold rulings cover, “compliant mechanisms for dealing and investing in gold in a present-day setting, potentially setting ground for constructing and structuring of new investing products in conformity with sharia rules and precepts”.
A statement from the organisation says its new rulings are the first standards for sharia-compliant investment in gold in the Islamic finance industry.
Based in Bahrain, AAOFII is a non-profit institution.
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