In December 2016 an event occurred that will ultimately rock the price of gold!
The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) approved a new gold standard which allows Gold as an investment for Muslims the first time.
This was done after the AAOIFI adopted Shariah compliant rules for trading gold.
The impact that this will have on the demand for physical gold has the potential to be huge. Nearly one quarter of the worlds population (1.6 billion people), previously unable to buy gold for religious reasons, now has the green light to buy gold.
The underlying basis of the Shariah compliance is the fact that, in order to meet the guidelines set out under Shariah Law, gold must be traded on weights and measures. It cannot be traded for future value or for speculation.
Examples of the investments that Muslim investors are now able to take advantage of include:
— Vaulted gold (physical gold storage in vaults)
— Gold savings plans
— Gold-mining cheers
— Physical gold ETFs
The new Shariah gold standard will not only mean a greater diversity in Shariah gold compliant investments but it will also create a greater emphasis on the role of physical gold in gold transactions.
The future for the price of gold is never been so bright!