In a statement made on Monday by the Accounting and Auditing Organization for Islamic Financial Institutions, it was revealed that the rules now approved gold to be used in the Islamic financial business, currently amounting to $1.88 trillion. The decision was made in agreement with the World Gold Council.
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) along with the World Gold Council believe that the change in rules regarding the Islamic Gold Trade will cause prosperity in the demand for gold. This possibly resulting in hundreds of tons of additional demand.
According to Bloomberg, GLD's SPDR Gold Trust is likely to qualify while the new standard will open a new market. The latter is agreed upon by Shariah scholar Mohd Daud Bakar as it was made apparent in his statement during a press conference held in Dubai on Monday. Moreover, the gold from Comex Gold Futures did not make the cut as it seems to lack the requirements set by the new standard.
In a report by the Khaleej Times, it is stated that the precious metals will boom in demand because of the new Shariah-compliant gold standard. Moreover, it will also set the bars significantly higher in the Islamic World. Eventually, the increase in gold prices is inevitable and will likely affect the global gold demand.
In addition, the new gold standards that are Shariah-compliant serves as an addition to the present AAOIFI standards. However, it does affect the gold investment in the future. The decision to add new rules in the gold trade was done in the hopes of progression in the long run.
The CEO of the World Gold Council, Aram Shishmanian, shared his insight regarding the new rules for the Islamic Gold Trade. "We are delighted that there is now definitive Shariah guidance on the permissibility of investing in gold." He said. "Gold is a proven wealth preservation asset that Islamic investors can now deploy to protect their wealth and diversify market risks."
Either way, the new Islamic gold standard is expected to be a groundbreaking move and should affect the demand for gold n the long run. Stay tuned to Jobs & Hire for more updates.
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