by Mark O’Byrne
The coming ‘sharia gold standard’ or shariah compliant gold could lead to a very significant source of new demand for physical gold coins and bars in the Islamic world. It is believed that this will contribute to much higher prices and gold “soaring” as some of the $2 trillion of assets held in Islamic financial institutions are allocated to the very small physical global gold market.
The Islamic finance entry into gold market could definitely shake the gold market as Islamic financial institutions around the world, which hold around $2 trillion in assets and are expected to double that asset base up to 2020, would certainly unleash large funds to participate in the Shariah-compliant gold trade” according to the Gulf Times:
“On the outlook for new investment opportunities, the rapidly growing Islamic finance industry has set sight on the gold market as initiatives are underway to establish a new standard to make the metal tradable under Shariah finance rules, eliminating disputes among scholars whether gold is to be treated as a currency or as a commodity.