![]() Halal Ways To Invest In Gold & Precious MetalsĪs we've just seen, the primary issue with trading commodities in general is the fact that they're not physically backed - the investor has no way to lay claim to the actual thing they've invested in. The result is higher risk created in the market - with little corresponding value actually being generated. The investor has no interest in owning the underlying commodity (and indeed, is unable to, as a retail investor). The primary form this takes is that of a 'Futures Contract' where an investor agrees with another party on a price and a sale date, and either profits or loses based on the future price of the commodity at contract expiry. ![]() To get around this, financial markets often trade derivatives of these commodities, and not the actual commodities themselves. The challenge with trading commodities is that they tend to be too expensive to physically store. Pretty much any basic good used that is fungible, and can be exchanged with other goods of the same type. There are different types of commodities, spanning everything from corn □, to beef □, to precious metals. Let's start by explaining why that is, and then discuss the halal methods for investing in precious metals. However, these are the execptions to the rule - the vast majority of commodities are in fact haram to trade (for purely speculative purposes). ![]() When discussing the different asset classes, I mentioned that there are ways to trade commodities (including gold, silver and platinum) in a halal manner. In this post, we run through several methods for investing in gold, silver, platinum and other precious metals - while avoiding the risks of exposing ourselves to non-halal instruments.
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