Shariah terms for buying gold

Draft, to be approved by Noon Diamonds' Shariah adviser before launch.

When gold is sold for money, the gold and its price must change hands together (taqābuḍ). Your piece is made for you and delivered, so your order works as follows, in line with AAOIFI Shari'ah Standards.

• AAOIFI Shari'ah Standard No. 57, Gold and its Trading Controls, 3/2/1: when gold is sold for currencies, both must be delivered in the contracting session, physically or constructively.

1. Your order is a promise to buy

Placing your order is a promise (waʿd) to buy your piece once it is made. You pay the full amount at checkout.

2. Your payment is held in trust

Your payment is held in trust (amānah) for you. We don't use it until your finished piece is handed to the courier.

3. The courier receives your piece for you

You appoint the courier as your agent (wakīl) to receive your piece on your behalf. The courier is whoever delivers it: a delivery company or our own driver. When we hand your piece to the courier, the sale is concluded, so the gold and its price change hands together.

• Standard No. 57, 5/1/3: it is permissible to appoint an agent to purchase and take possession of gold.
• AAOIFI Shari'ah Standard No. 23, Agency and the Act of an Uncommissioned Agent.

4. Delivery

If your piece is lost or damaged on the way, we replace it or refund you: this is our own undertaking. If a delivery fails, we arrange another. If you refuse it, we keep it for you to collect or for another delivery.

5. Withdrawing

If you withdraw before your piece is handed to the courier, we refund your payment minus the actual costs already spent on your piece. If we can't make or deliver your piece, we refund you in full.

• Standard No. 57, 8/3: if a binding promise to purchase gold is not kept, the actual damage it caused may be claimed.

About AAOIFI

AAOIFI (the Accounting and Auditing Organization for Islamic Financial Institutions) is an international not-for-profit body founded in 1991 and based in Bahrain. Its 100 standards in Shari'ah, accounting, auditing, ethics and governance are widely used by Islamic banks and regulators.