Exchanging gold for gold
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The third question of Fatwa No. ( 2543 )
Q3: The current situation in gold sales is as follows: A person comes with used gold and wants to exchange it for new gold. We proceed as follows: I buy his old gold at a price lower than the new gold, because it requires new crafting and labor costs. Then I pay him its value in cash. After receiving the payment, I weigh out the new gold for him according to the market price at which it is sold—meaning, at a higher price than the used gold, due to its newness. Please note that there is no condition requiring him to buy from me; I
leave it to his choice whether he wants to buy from me or from someone else. Please inform us of the validity of this.
A3: What you mentioned in your question, that you buy the gold and pay its value to its owner, and then sell him the new gold for its known price without any stipulation, is not problematic. This is because it is obligatory for you to pay the value of the gold sold to you in cash to its owner. He is then at his option; if he wishes, he buys new gold from you and pays its value in cash. It does not harm him if the cash you paid him is included in what he pays you, because selling gold for silver or any currency is not permissible except hand-to-hand.
Q3: The current situation in gold sales is as follows: A person comes with used gold and wants to exchange it for new gold. We proceed as follows: I buy his old gold at a price lower than the new gold, because it requires new crafting and labor costs. Then I pay him its value in cash. After receiving the payment, I weigh out the new gold for him according to the market price at which it is sold—meaning, at a higher price than the used gold, due to its newness. Please note that there is no condition requiring him to buy from me; I
leave it to his choice whether he wants to buy from me or from someone else. Please inform us of the validity of this.
A3: What you mentioned in your question, that you buy the gold and pay its value to its owner, and then sell him the new gold for its known price without any stipulation, is not problematic. This is because it is obligatory for you to pay the value of the gold sold to you in cash to its owner. He is then at his option; if he wishes, he buys new gold from you and pays its value in cash. It does not harm him if the cash you paid him is included in what he pays you, because selling gold for silver or any currency is not permissible except hand-to-hand.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.