Shariah-compliant investors sharpen focus on halal gold

• Gold seen as natural fit for segment
• 1,500 tonnes enter UAE every year
• Islamic finance worth $5.5trn in 2025

Gold is increasingly being marketed as both a safe-haven asset and a sharia-compliant investment across the Gulf, as geopolitical tensions and record-high prices drive fresh demand among Islamic investors.

The surge comes as gold prices remain near historic highs following months of regional instability linked to the Iran conflict.

The situation has prompted wealthy Gulf investors, family offices and retail buyers to increase allocations to physical bullion and Islamic gold products.

To be strictly halal, transactions require immediate (spot) payment and prompt delivery of the asset, avoiding riba (interest), gharar (excessive uncertainty) and speculative leverage.

“Wealth managers are asking us for physical gold to be included in their clients’ portfolios with that halal element,” Steve Hawkins, CEO of Paradigm Holdings, which focuses on gold bullion, diamonds and other precious metals in the Middle East and Africa, told AGBI.

Dubai Gold and Commodities Exchange’s (DGCX) sharia-compliant T+1 gold contract, which launched in 2017, traded 1,165 kilograms in 2025 and a further 306 kilograms in early 2026 “reflecting steady institutional and investor demand”, said Louis Hems, DGCX commercial director.

Islamic finance was estimated to be a $5.5 trillion global market last year and could expand to $7.5 trillion by 2028, according to Standard Chartered. Gold is seen as a natural fit because, unlike conventional fixed-income assets, it does not typically generate interest payments, which are prohibited under Islam.

Islamic scholars traditionally viewed gold as money rather than a commodity, creating uncertainty around whether investors could legally buy and sell it for profit, said Andrew Naylor, head of Middle East and public policy at the World Gold Council, who helped lead the development of the Islamic gold standard.

Another question centred on whether ownership required physical possession or whether “constructive ownership” through exchange-traded funds and investment accounts was sufficient.

Working with scholars in Malaysia, Indonesia and Bahrain, the World Gold Council helped develop the global sharia standard for gold through the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions, commonly known as AAOIFI. The standard was launched in 2016 and paved the way for a new generation of Islamic gold products.

Today, halal gold investments generally require spot settlement, immediate ownership transfer and the avoidance of excessive speculation or leverage, Naylor said.

“It’s about proving title and ownership,” Hawkins said. “You agree the price there and then, the transaction settles immediately and there is no speculation around delayed pricing.”

Ethical sourcing is also becoming more important for Gulf investors. Hawkins said buyers increasingly want assurances that gold has not funded militia groups, forced labour or illicit mining in Africa.

“There are about 1,500 tonnes of gold coming into the UAE every year,” he said. “Dubai remains the epicentre of physical gold trading.”

According to the World Gold Council, gold bar and coin investment demand across the GCC showed strong year-on-year growth in the first quarter of 2026, with the UAE and Kuwait up 27 percent and Saudi Arabia up 15 percent.

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The Middle East remains the world’s third-largest gold-consuming region, although the balance is shifting. Historically, around 60 percent of regional demand came from jewellery and 40 percent from investment, Naylor said.

That investment share is now rising rapidly as Islamic banks, exchanges and fintech platforms launch sharia-compliant gold products.

Kuwait Finance House, the first Islamic bank established in 1977 in Kuwait, offers sharia-compliant gold investing through a dedicated account. In the UAE, fintech platforms including OneGram and Minted market tokenised or fractional gold investments backed by physical bullion held in vaults, targeting younger Muslim investors seeking exposure to gold without breaching Islamic finance rules.

“While reliable market sizing remains limited, demand for regulated, physically backed and potentially sharia-compliant digital gold products is clearly gaining momentum,” Hems said.