The Fluctuations in Gold Prices

প্রশ্ন · Question

Assalam Alaikum Wa Rahmatullah Wa Barakatuh our esteemed Sheikh
I hope this question reaches you in good health and well -being. I ask
Allah ﷻ to guide you in upholding His Deen and implementing His law.
My question is: We have recently witnessed a significant rise in the
price of gold, reaching more than double its original price in just a few
years. Does this mean that gold, as a stable metal and a standard for
currencies, is no longer so, but has become subject to change? Or is
this change due to the control exerted by certain regimes and political
circumstances ?
If so, how will the Islamic state, which will soon be established, Allah
willing, maintain its stability and prevent manipulation of it by the
enemies of Islam? Barak Allahu feek.

উত্তর · Answer

Wa Alaikum Assalam Wa Rahmatullah Wa Barakatuh
The fluctuations in gold prices are due to its status as a commodity.
Therefore, speculation affects its price, causing it to rise and fall. This is
especially true because the world's major powers, particularly the
United States, prioritize the dollar as the primary medium of exchange.
They increase or decrease the printing of dollars without
accountability. Furthermore, their colonial relationships with several
countries contribute to the dollar's stability in many cases, making it
almost as if it were go ld. If the situation were different, and currency
was actually gold, and every piece of paper printed had to be backed
by a certain amount of gold that could be exchanged for it at any
time—what is known as reserve paper —then all fiat currency (i.e.,
non-reserve paper) would be worth no more than the paper it is
printed on. To clarify this, I will mention two points that will aid to
understand more:
First: In my book, " Economic Crises: Their reality and solutions from
the viewpoint of Islam," I discussed the following:
[Economic crises as a result of the reality of currency: When the world
followed the gold standard in its monetary dealings it was living in a
period of economic prosperity and monetary stability. But when this
system vanished … and dealings became solely through the
compulsory abstract banknotes (fiat). So, the situation deteriorated,
and the incidence of crises accelerated, one after the other. The gold
standard system was used to guarantee a fixed exchange rate, as the
monetary unit of each country was gold or papers that represented full
value in gold, and w as liable for conversion at any time. Consequently,
the exchange rate between the countries was constant because it was
related to an acknowledged gold unit. For example, a dinar in Islam is
defined as 4.25 a gram of gold, and the British pound was defined by
law as 2.0 grams of pure gold and the French franc was equivalent of
one gram and so on. Therefore, the exchange rate was fixed.

This system stabilized the value of the monetary unit both internally
within the country and externally. The evidence for this was that the
standard prices of gold in 1910 were almost at the same level they
were in 1890. However, after the abolition of this system the
occurrence of these crises has become considerable…]
Second: There is no fear for the Islamic state’s currency when it is
established, Allah willing. There is no fear that it will be affected by the
speculation of other countries if they refuse to adopt gold and silver as
their currency and continue with the paper currency system and then
try to influence the state, because of the advantages that the Muslim
countries enjoy that make them safe from any external speculation.
The following has been stated in the economic system regarding this
matter:
[…the exchange rate between the Islamic State's currency and the
currencies of other countries would not have an effect upon the
Islamic State for two reasons:
1. The Islamic lands possess all the raw materials that the Ummah and
the State need. Therefore, its need for other countries' commodities
would not be essential or necessary. It is self -sufficient of its local
goods, thus not affected by exchange fluctuations.
2. The Islamic lands possess commodities which all other countries
need, for example oil. The Islamic State could restrict the sale of such
commodities unless they are paid for by gold. The State could do away
with other countries' commodities by relying solely on its own local
commodities, and who ever owns commodities that all other peoples
need, could not in any way be affected by the fluctuation of the
exchange rate. It is it who could control international markets, with
none able to control its currency].
Rest assured, dear brother, that the party has men of wisdom,
awareness, and sound judgment, and before and after all else, the

help and guidance of Allah ﷻsufficient to turn the plots of the
enemies of Islam back upon themselves. And Allah is the protector of
the righteous.
I hope this is sufficient, and Allah Knows Best and is Most Wise.
Your Brother,
Abu Yasin
7 Ramadan 1447 AH
24/2/2026 CE