Category: Riba, Loans and Working in Banks

Selling Gold for Gold, Silver for Silver, hand to hand and the same for the same

Question :

Verily, I sell and buy gold jewelry and someone told me that it is not permissible to sell it unless it is for cash given hand to hand (i.e., paid up front). So, I said to him that this (the jewelry) is not currency like the Saudi Junayh, because it is jewelry in the form of trinkets and adornments. Among them are items that are 21 carrots and 18 carrots, and they contain mixed copper for their modification. There is also silver that is 21 carrots and 18 carrots. The money that I bought this jewelry with, was cash and it was not gold. This gold is jewelry. Thus, I doubted concerning this and I have sent this letter to you so that you can give us a ruling. May Allah reward you with good. If you say that it is obligatory to make the complete payment and exchange at the place of the transaction, is it the Riba of the people, whom Allâh said concerning them:

"Those who eat Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytan (Satan) leading him to insanity."

It is not permissible to sell gold for gold or silver for silver, except like for like (i.e., in weight and measure) and hand to hand (i.e., paid on the spot). It makes no difference whether the two exchange items are from jewelry or cash, or if one of them is jewelry and the other is cash. It also makes no difference whether the two exchange items are paper bank notes or if one of them is a paper bank note and the other is jewelry or cash.

If one of the two exchange items is gold jewelry or cash and the other is silver jewelry or cash, it is permissible for them to differ in amount, but the payment must be made before the parties separate from the place of the agreement. Whatever is opposed to this in this issue, then it is Riba and its practitioner is included in the generality of Allâh's Statement:
"Those who devour Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytan (Satan) leading him to insanity."

Source:
The Permanent Committee
Fatawa Islamiyah, Vol. 3 Pages 362-363