The Shari'ah Method for Exchanging Gold for Gold
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A man came to buy gold from me and sell me gold. The price of his gold was, for example, two hundred riyals, and the price of my gold was three hundred riyals. So I gave him cash for the value of his gold, and then I took the value of my gold from him, and we did not separate. Is this permissible, or is it necessary that we separate between the two transactions?
Answer: In the name of Allah, the Most Gracious, the Most Merciful. All praise is due to Allah, and may Allah send prayers and peace upon our Prophet Muhammad, and upon his family and his Companions, and whoever follows his guidance. As for what follows:
It is established from the Messenger of Allah (peace and blessings be upon him), in the hadith of 'Ubadah, and the hadith of Abu Hurayrah (may Allah be pleased with them both), and others, that he said:Mishkat al-Masabih 2809. So if a person wants to sell gold to a goldsmith for other gold, or to someone else, it is necessary that the gold be identical; equal in weight; like for like. He sells his gold to him for a separate price and takes possession of it from him, and then after this he buys other gold.
As for selling gold for gold with an addition of cash, that is not permissible. But the Shari'ah method is to sell the gold he has, whether it is of poor quality or good quality, and then take possession of the price for it, and then after that buy from him whatever he wants of the other gold for its value in cash, in paper money or silver, hand to hand.
They do not separate until each one takes possession of his right; the seller delivers the gold, and the buyer delivers the cash, whether in silver, or in paper money, or in the known currency, such as the dollar or the Saudi riyal or otherwise.
Answer: In the name of Allah, the Most Gracious, the Most Merciful. All praise is due to Allah, and may Allah send prayers and peace upon our Prophet Muhammad, and upon his family and his Companions, and whoever follows his guidance. As for what follows:
It is established from the Messenger of Allah (peace and blessings be upon him), in the hadith of 'Ubadah, and the hadith of Abu Hurayrah (may Allah be pleased with them both), and others, that he said:
Abu Sa'id al-Khudri reported God’s Messenger as saying, "Gold is to be paid for by gold, silver by silver, wheat by wheat, barley by barley, dates by dates, and salt by salt, like for like, payment being made on the spot. If anyone gives more or asks more he has dealt in usury. The receiver and the giver are equally guilty.” Muslim transmitted it.
الذهب بالذهب، مثلًا بمثل، سواءً بسواء، يدًا بيد، فمن زاد أو استزاد فقد أربىAs for selling gold for gold with an addition of cash, that is not permissible. But the Shari'ah method is to sell the gold he has, whether it is of poor quality or good quality, and then take possession of the price for it, and then after that buy from him whatever he wants of the other gold for its value in cash, in paper money or silver, hand to hand.
They do not separate until each one takes possession of his right; the seller delivers the gold, and the buyer delivers the cash, whether in silver, or in paper money, or in the known currency, such as the dollar or the Saudi riyal or otherwise.
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.