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Muslim Assayers Council
IMC Shariah

IMC Shariah Compliance:

As the Muslim population globally continues to grow, so too does the appetite for investing, trading, working within Sharia compliant Gold (dinar) & Silver (dirham) investments. Halal investing requires the investor to know all about investment products, and then it is possible to assess if the investment is in line with Islamic monetary principles. For Muslims, one of the most critical aspects of Sharia law is ensuring that all income sources are halal. Islamic monetary finance places huge importance on ensuring that income is halal (legitimate) as this is enshrined in the Qur’an.

Historically, the focus of halal and haram has been most prominent when it comes to food, but the concept of halal and haram must also be applied to all things beyond food including lifestyle, finances, investments, and business.

Whether Islamic trading involves investing in gold, stocks, commodities, or fintech, we will examine the concept of halal investments, the principles of Islamic finance, and the applicability of Sharia law when it comes to trading, investing and operating within foreign exchange markets for precious metals and commodities.


Halal investment refers to the investment/exchange of money in accordance with Islamic finance principles. Sharia monetary law is centered around the concepts of social justice, ethics, and using finances to help build communities. For any Muslim considering halal investment strategies, the focus should be partnerships that are mutually financially beneficial.

Sharia law lays down principles and regulations Muslim investors must comply with if they want to invest in halal products such as gold & silver. According to Sharia rules, compliance with Islamic finance principles leads to a more ethical and just society. This goes against the western notion that making money is the ultimate aim for investors. Whilst Islamic finance does not prohibit making money, it does place emphasis on ethics and justice, so that a balance is achieved between religion, family, life, intellect, and property.

Halal investments should not be dismissed by those wanting to generate income. The Islamic monetary system is not restricting or limiting, it simply proposes ethical practices and mutual benefit. Halal investments encourage Muslims to invest responsibly and always ethically. It is still very possible to make money ethically with the right halal investments. Investing within Sharia compliant products can potentially reduce the risk for investors, and is one of the reasons why Muslims worldwide can withstand the economic turmoil that we are currently passing through.


Interest payments, or investments that include an interest element, are strictly prohibited in Islam. Charging interest is not considered to be Sharia compliant as it is deemed to be an exploitative practice.


Sharia rules do not allow participating in contracts where there is excessive uncertainty or risks. Investing or partaking in any short-selling or uncertain contracts are forbidden in accordance with Islamic finance principles.


For Muslim investors, investment in any business that is involved in prohibited activities such as gambling, and selling alcohol is prohibited.


Sharia law prohibits speculation or gambling. So, if any form of investing includes contracts where the ownership is dependent on events in the future that are uncertain, this is deemed to be precarious.


Riba is a key component when it comes to Islamic finance principles. For Muslim investors, riba plays a central role in the practice of Sharia compliant financial investing and saving. In Islamic finance terms, riba refers to the concept of interest, or usury and unjust gains made in the course of investment, trade and business. Riba is condemned in hadith and the Qur’an. Linguistically, riba refers to any 'increase' or growth, but the concept itself is rooted in the notion that riba distorts wealth as the money lender is able to exploit others and increase their wealth perpetually without any substantial contribution to society from them selves.

The concept of riba al-nasee'ah that refers to an increase in wealth due to the passage of time is one of the most common types of riba. Bonds fall into this category and are therefore not permissible for Muslim investors. The prohibition of riba is one of the reasons Muslim investors trading in the financial markets prefer commodity stock investments over other forms of investing.


As the Muslim economy continues to increase year on year, the Islamic finance industry is also growing to cater for the need for growing halal investment options and products. Some of the main benefits of halal investments for Muslims (and non-Muslims) include the following:

  • Social Responsibility - taking a socially responsible approach to finances and investment not only means the investment is Sharia-compliant, but it can also lead to human rights protections, just distribution of wealth, and ethical investments that minimise environmental degradation.
  • Less Risk - Islamic finance principles mean that halal investment products are less susceptible to huge market changes and fluctuations. Global crises do not impact Islamic finance as they do more traditional banking. As short term speculation is discouraged in Islam, the exposure is much lower overall.
  • Growing wealth in a halal way - this is the most critical benefit for Muslim investors. Not only does halal investment mean that Muslims can engage and involve themselves with global markets, it also means that Muslims partake in disciplined investment that requires ethical due diligence.


As with any type of investment, there are risks alongside benefits. Whilst Islamic finance does not prohibit risk taking, it does discourage speculative investments. Some of the risks associated with halal investment include:

  • Due diligence - the level of information gathering required for halal investments is far greater than traditional investment. The due diligence takes time and requires attention to detail that not all investors are willing to do.
  • Diversification - investing in a halal way requires time and consideration. This often means that the portfolio is not as diverse, or quick to grow, as traditional investments.

In terms of investment, gold is considered a safe and traditional means of investment that is Sharia compliant. Gold often appreciates in value, is easy to obtain and invest in, and is not deemed to be in breach of any Islamic finance laws.

Any halal investment must be in accordance with the Sharia principles mentioned above, and must be done with consideration of ethics and social justice. Companies whose main business goes against the central tenets of Islam are considered universally unacceptable as investment opportunities.

There are certain industries that are deemed to be unethical or at risk of causing harm to society, and Muslims should therefore avoid opportunities in these sectors:

  • Industries manufacturing, promoting, advertising, or selling alcohol
  • Industries manufacturing, promoting, advertising, or selling cigarettes or drugs
  • Banking products or financial transactions that include interest (riba)
  • Any industries related to gambling
  • Industries related to prostitution or pornography
  • Industries relating to pork

Sharia law prohibits investing in industries and businesses where at least 5% of their income comes from unethical sources (this is known as the 5% rule). Before investing in any business, Muslims should check out the financial statements and positioning of the company and do some research on their sources of income and profits and where they are derived from.


When undertaking due diligence prior to investing, you should consider the following 3 types of investing opportunities:

  1. Companies with halal practices - these are known as clean companies (from a halal investment perspective) and are companies that operate in a completely halal way. These companies operate within the Sharia finance rules, and have a clear halal audit trail.
  2. Companies with haram practices - these types of companies operate within prohibited industries such as gambling and alcohol.
  3. Mixed companies - these companies may have halal practices but these are mixed with haram practices or activities.

For halal investors, option 1 is always the best option as there is no overlap of the halal-haram considerations. Companies that have a cross-over between halal and haram should be avoided.