Many of the Muslims countries in the world are governed by Sharia law and the law prohibits gold from being used as an investment. A huge number of Muslims can own gold but not speculate on it for future returns. The fact that there is nothing clear in the law made things even more complicated. But things are about to change soon enough.
AAOIFI (Auditing Organization for Islamic Financial Institutions) sets the standards for investment based on Sharia law and it currently drafting a guideline along side WGC (World Gold Council. Once drafted, the new guideline might open the doors for Muslims investors to trade gold as a commodity. Member of AAOIFI, Yusuf DeLorenzo said in a statement, “The hesitation about investing in gold when credible Sharia standards are unavailable is nearly universal in the Islamic world. On the reverse side of the equation, however, gold has historically been the choice of individual Muslims desirous of preserving wealth and value.”