gold nuggets

Sharia Law Gold Standard Could Shake Gold Markets

Right now, with gold prices trending downward, some investors who trade online or trade futures are edging away from gold. Thanks to the strength of the United States Dollar (USD), gold prices have been dropping in recent trading. The United States Federal Reserve increasing the prime rate only served to push the price of gold per ounce even lower.

Between the ongoing volatility of gold prices and the potential for a spike in demand in the upcoming weeks, gold remains a great investment for those who watch the markets.

The Sharia Gold Standard Could Have a Powerful Impact

Earlier in December, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), which sets standards for Islamic investors, created Sharia-compliant rules for investing in gold. While those rules have not been publicly released, it has been intimated they will be made public by the end of December. When that finally happens, those who have already invested in gold are likely to see impressive fluctuations in the trading price of gold.

Why would the announcement of a Sharia-compliant gold standard affect gold markets?

For most of modern history, Islamic investors have believed that investing in gold, as opposed to using it as a currency, was a violation of their faith. However, AAOIFI Islamic investors and Islamic financial companies represent $2 trillion USD of global investment power. This means that even if a tiny percentage of Islamic investors decide to invest in gold following this dramatic shift, the implications for demand and price on the global gold market could be substantial.

There is, of course, no guarantee that Islamic investors will flock to gold. Historically, gold investments comprise only a small fraction of public investments in any region or country. However, if even 1 or 2 percent of Islamic investments wind up in gold over the upcoming months, the price of gold could rise sharply.

Now Is the Time to Begin Trading Gold

If you don’t already do so, right now is a great time to try online gold trading via a Forex platform. These innovative Forex trading platforms allow you to leverage your available liquid capital, allowing you to control the buying and selling of more gold than if you were buying physical bullion. With the price of gold likely to continue fluctuating and possibly about to increase, there has never been a better time to get started with online Forex gold trading.

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