Gold as a store of value: advantages, limits and buying rules
AmanaFi team · Updated · 1 min read
Gold is valued as a long-term store of value, but it produces no income and its price fluctuates. In Islam, buying it follows rules: immediate payment, no delay.
Advantages
It is recognised everywhere, depends on no company and has long kept purchasing power over long periods.
- An easily exchangeable store of value.
- Independent of any particular issuer.
- Diversifies wealth.
Limits
No income, sometimes strong price swings over several years, buying and selling costs (the jeweller's margin), and a risk of theft or loss to protect against. A piece of jewellery's price includes workmanship, which is not recovered on resale.
Buying rules
Exchanging gold for money requires immediate handover on both sides: no deferred payment. Prefer low-premium bars and coins to jewellery. And remember that gold held as savings is subject to zakat if it reaches the nisab.
Frequently asked
How much gold should I hold?
There is no universal percentage. Many keep a small share for diversification, after building an emergency fund.
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