Gold and Its Trading Controls — practice questions

Correct answer: B. Clauses 2, 3/1/1 and 3/2/1: Gold is a fungible Ribawi commodity subject to the rulings of currency exchange (al-Sarf). The sale of gold for gold is permissible only if the countervalues are equal in weight, regardless of whether they are new or old, used or unused, and both are exchanged in the contracting session, physically or constructively (see Clause 2/6 of Shari’ah Standard No. (1)). Craftsmanship does not justify an excess in weight, and a deferred cash balance would breach the spot requirement.

Correct answer: D. Clause 3/1/2: If gold is not the primary asset of a commercial entity whose activities do not involve trading in gold, silver or currencies, and the entity or part of it is sold together with that gold, the permissibility of the sale is not subject to the rulings of currency exchange. However, it is not permissible deliberately to establish a portfolio for the specific purpose of trading in gold unless it complies with the rulings of currency exchange.

Correct answer: A. Clauses 3/1/3, 3/1/4 and 3/2/1: Gold may be sold for silver regardless of disparity in weight, and for currencies at any agreed price, but in both cases the countervalues must be exchanged in the contracting session; gold for gold requires both equal weight and spot exchange. Gold may be sold for anything else, such as commodities, a usufruct or a service, at any price without the requirement of immediate exchange, so deferment of one countervalue is then permissible.