This is a really big deal. The the Accounting and Auditing Organization for Islamic Financial Institutions adopted Shariah-compliant rules for trading gold. This means Islamic banks can use gold to satisfy asset requirements for audit compliance, opening up a whole new source of demand for gold. The Gold Enthusiast doesn’t expect to see an immediate price bump from this. It will take some time for banks to fully understand how to satisfy applicable Shariah compliance rules, primarily Zakah. Zakah is one of the five pillars of Islamic faith, and is a religious obligation based on the size of one’s wealth. In Western raw economic terms we would call this a wealth tax. We’ll no doubt be reporting more on this in the future.
About the author
Mike Hammer has had a wide-ranging career, with trading and investing as continuing themes. Mike graduated with a business degree and spent years as a financial advisor, before moving to New York and to pursue a career in IT and education. For more than a decade Mike has been working with the Adam Mesh Trading Group as a stock market and commodities mentor. He’s trained over 200 individuals, spoken at several national conventions, and is a frequent contributor to educational webinars.
Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keeps him in touch with "the student mindset".
Mike focuses on the precious metals markets, the energy industry, and the financial sector. His motto is "Plan your trade, then trade your plan!"