TYC Finance ALI 

In 2024, gold, as a representative of precious metals, has shown remarkable performance, with an increase of over 25% from the beginning of the year to August, becoming the best performer among most asset categories. The main supporting factors for this growth include the continuous gold purchases by global central banks, strong investment demand in the Asian market, stable consumer demand, and ongoing geopolitical uncertainties. Islamic finance, as a form of finance that complies with Islamic teachings, also has a unique perspective and set of regulations for the investment in precious metal assets such as gold. Islamic finance emphasizes that all transactions must comply with the principles of Islamic law, avoiding interest, speculation, and uncertainty. It tends to support physical gold trading to ensure the fairness and transparency of transactions.

Islamic finance has clear statements and regulations on the trading of gold and silver. The Hadith, which has been passed down for thousands of years in Islam, clearly states: exchange gold for gold, silver for silver, and the trade must be an equal exchange; any increase is considered as Riba (interest). Since gold and silver were the currencies used during the time of the Prophet Muhammad in Islam, this statement is also taken as one of the legal evidences that no interest should be charged on any money lending by later generations. In addition, for the trading of precious metals such as gold, as early as 2016, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), headquartered in Bahrain, jointly issued the Islamic Fiqh Gold Standard with the World Gold Council. There are also relevant regulations and statements in the "Currency Transactions" section of the modern Islamic financial accounting standards published by the Accounting and Auditing Organization for Islamic Financial Institutions. These statements and standards have established specific rules for gold as an investment tool in the Islamic finance industry and have laid the foundation for Islamic investors to enter the gold market. Furthermore, compared with traditional financial market transactions, Islamic finance has various regulations and differences in the trading of gold and silver, and here are some brief comparisons:

- Transaction immediacy: Islamic finance requires that gold and silver transactions must be settled immediately, without any delay.

- Weight consistency: In transactions of the same metal, the weight must be equal, and no difference is allowed.

- Cooling-off period and contract termination right: Islamic finance does not include a cooling-off period option, such as the right to terminate the contract.

- Deferred delivery: Islamic finance does not allow for deferred delivery terms in the contract.

- Risk management tools: Islamic finance emphasizes the certainty and transparency of transactions and limits the use of traditional financial derivatives.

- Moral and religious considerations: Transactions in Islamic finance must comply with Islamic law (Shariah), avoiding improper gains and speculative gambling behavior.

In summary, the trading rules of Islamic finance provide a unique perspective, emphasizing morality, religion, and social responsibility, while traditional financial markets focus more on flexibility, efficiency, and diversity. In terms of the gold market, the volatility of gold prices is affected by various factors, including monetary policy, inflation expectations, and geopolitical risks. Technological development, consumer demand, mining dynamics, and ESG factors are also shaping the market landscape of gold and precious metals. Traditional investors can now invest in gold through a variety of financial instruments, such as gold ETFs, futures, and options. Islamic finance, on the other hand, emphasizes that transactions must comply with Islamic law principles, avoiding interest, speculation, and uncertainty.

The gold market has shown strong growth momentum in 2024. From the current market perspective, the expected interest rate cuts by developed economies are likely to attract more investors to the gold market. Under the expectation of a global stock market bubble burst, investors may seek risk hedging methods, which will further increase the demand for gold. At the same time, the gold market is also facing a series of challenges and risks, such as a decrease in gold demand from central banks or large-scale profit-taking by institutional investors, which may affect gold prices. In addition, factors such as global economic recovery leading to rising interest rates and a continuous decline in geopolitical risks may also reduce the attractiveness of gold as a safe-haven asset. Therefore, when considering gold investment, investors need to comprehensively consider market dynamics, risk factors, and diversified investment tools. Similarly, Islamic finance encourages investors to engage in ethical and socially responsible investments, while also emphasizing the importance of gold as a value storage and a part of a diversified investment portfolio. It is believed that with the continuous development of the market, gold is expected to continue to play a more important role in global asset allocation."