Category: the book of sales Transactions

He bought some Gold and kept it until its Price increased, then he sold it

Question :

A man bought a piece of gold for 200 dinars and he kept it for a period of time until the value of the gold increased. Then, he sold it for 3,000 dinars. So, what is the ruling on this increase?

Answer:

There is no harm in this increase and no problem with it since the Muslims have remained like this in their buying and selling. They buy products and wait until the price increases and maybe they buy it for themselves to use and then the value goes up very high and they see the opportunity to sell it. Thus, they sell it even though they did not have the intention to sell it before. What is important here is that the increase, when it follows the market (price), there is no harm in it even if it increases manyfold.

However, if the increase is in gold when exchanging it for other gold and taking an increase for other gold, then this is forbidden. This is because selling gold for gold is not permissible unless it is done weight for weight and hand to hand (i.e., paid up front) as is confirmed by the Hadith of the Messenger of Allâh. So, if you sold gold for gold, even if they differed in quality, meaning that one of them is better than the other, this is not permissible except like for like, equal for equal and hand to hand. If you took two Mithqals of 18kt gold for a Mithqal and a half of 24kt gold, this is forbidden and it is not permissible because they must be equal (in weight). If you took two Mithqals of gold for two Mithqals of gold, but one of them is to be given at a later time, then that is also not permissible, because the gold must be received at the meeting of the sales agreement. Similar to this is selling gold for the known paper money. If the person buys gold from the merchant or the goldsmith, it is not permissible for him to go away from him until he gives him the complete price, as this paper money has the status of silver, and selling gold for silver must be done with receipt taking place at the meeting of the sale agreement before the parties separate. This is due to the Messenger's statement:
"If these types of items differ, then sell however you wish, as long as it is hand to hand. "

Source:
Ash-Shaykh Ibn 'Uthaimin
Fatawa Islamiyah, Vol. 4 Pages 402-403