What is the ruling on buying gold with paper currency without necessity? And what is the ruling on trading in paper currency?
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The questioner : Is it permissible to buy gold with paper currency without necessity?
The Shaykh : No.
The questioner : So how do Muslims obtain gold?
The Shaykh : You said without necessity.
The questioner : Without necessity, he wants to grow his wealth by buying gold.
The Shaykh : And then what does he do with the gold? He sells it.
The questioner : To preserve his wealth.
The Shaykh : Then he sells it, meaning he ends up buying paper with it.
The questioner : If he needs to sell it, he sells it.
The Shaykh : My brother, we have always said, and will always say, that trading in paper currency, whether you buy paper currency with paper currency or buy gold with paper currency for the purpose of trading, is not permissible. As for necessity, there is no necessity here except to preserve your wealth. For example, if you see that a certain currency is constantly falling in value, and you are afraid that this currency will become like any other piece of paper with no value, then you rush to buy gold and keep it with you; this is permissible. And whenever you need to spend from this gold to provide for yourself and your family, doing so is permissible. However, it is not permissible for you to buy it now because gold is cheap, and then, on the contrary, when it becomes expensive, you sell it. That is trading, and that is not permissible. So, within the limits of necessity, if you mean what you mentioned just now, it is permissible. Please proceed.
The questioner : May Allah reward you with good.
The Shaykh : No.
The questioner : So how do Muslims obtain gold?
The Shaykh : You said without necessity.
The questioner : Without necessity, he wants to grow his wealth by buying gold.
The Shaykh : And then what does he do with the gold? He sells it.
The questioner : To preserve his wealth.
The Shaykh : Then he sells it, meaning he ends up buying paper with it.
The questioner : If he needs to sell it, he sells it.
The Shaykh : My brother, we have always said, and will always say, that trading in paper currency, whether you buy paper currency with paper currency or buy gold with paper currency for the purpose of trading, is not permissible. As for necessity, there is no necessity here except to preserve your wealth. For example, if you see that a certain currency is constantly falling in value, and you are afraid that this currency will become like any other piece of paper with no value, then you rush to buy gold and keep it with you; this is permissible. And whenever you need to spend from this gold to provide for yourself and your family, doing so is permissible. However, it is not permissible for you to buy it now because gold is cheap, and then, on the contrary, when it becomes expensive, you sell it. That is trading, and that is not permissible. So, within the limits of necessity, if you mean what you mentioned just now, it is permissible. Please proceed.
The questioner : May Allah reward you with good.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.