Is trading in old gold jewellery for new halal?
Gold is a riba item: gold for gold must be equal in pure weight and both handed over at once, whatever the age or craftsmanship. The Prophet’s own advice for trading up is to sell for money, then buy with the money. The jeweller’s common practice of netting old gold plus cash against a new piece is riba when the new piece does not weigh more.
The guidance
I want to swap my old gold jewellery for a new piece. How is it done?
- I sell my old gold for cash, take it, then buy the new pieceHalal · Trade · Sahih al-BukhariThis is the Prophet’s own advice: sell for money, then buy with the money. Each sale is gold for money on the spot, at any agreed price, so the shop may pay less for old gold and charge for new craftsmanship.Pay for the new piece in full on the spot. Buying gold on instalments is not allowed.
- I swap old for new gold of equal pure weight, nothing added, on the spotHalal · Exchange · Hadith 1Gold for gold is allowed when the pure gold weighs the same and both are handed over at once. Age and craftsmanship do not count.
- I give old gold plus cash for a new piece weighing the same or lessHaram · Riba · Hadith 1When the new gold weighs the same or less, your cash is a surplus on gold for gold. That is riba, even if it is called a charge for workmanship.Sell the old gold first, or have your own gold remade and pay the goldsmith only for the work.
- I give old gold plus cash for a heavier new piece, all on the spotHalal · Exchange · OIC 84Hanafi scholars allow this: your gold matches the same weight of new gold, and your cash buys the extra gold. It works only if the new piece truly has more pure gold and everything changes hands at once.Other views: The other schools reject this and require selling the old gold first, which is the safest route everywhere.
People also ask
Can I pay for the goldsmith’s work when swapping jewellery?
If you give your own gold to be remade, pay the goldsmith a wage for the work. If you swap gold for gold, no extra may be paid for workmanship. Selling first and buying second is the clean route.
Can I buy gold jewellery on instalments?
Not by the safer view: gold bought with money must be delivered and paid for on the spot. Some Hanafi muftis allow it if the gold is handed over at once; AAOIFI’s gold standard requires both sides on the spot.
Is exchanging 22-carat gold for 18-carat halal?
Only if the pure gold in each is equal in weight and the swap is on the spot. Otherwise sell one for money and buy the other.
Is gold plus cash for a heavier piece halal?
Hanafi scholars allow it: your gold matches the same weight of new gold and your cash buys the extra gold, provided the new piece truly has more pure gold and everything changes hands at once. The other schools require selling first.
Related questions
All questionsThe four schools on riba
This guidance follows the Hanafi school as applied today by Mufti Taqi Usmani and the AAOIFI standards. Notes mark where the Maliki, Shafi’i or Hanbali schools differ. The four schools on riba →