Trading gold in MT5 – Halal or Haram

For Muslim traders, trading raises many questions, especially when it comes to compliance with Islamic norms. This article discusses gold trading on the metatrader5 (MT5) platform at Exness broker halal or haram for Muslim traders.

Is metatrader5 halal at Exness?

Since Muslim traders have certain needs, forex brokers have introduced Islamic (Muslim) trading accounts. Unlike regular accounts where brokers make money on interest rates, Muslim trading accounts exclude interest rates, which is in line with the prohibition of usury. 

Forex accounts for Muslim investors allow you to participate in forex trading without paying interest or commissions, which is halal.

In order for gold trading on Exness MT5 to comply with the norms of Islam, the following principles should be observed:

• Swap-free accounts (Exness can offer swap-free accounts, which means no interest charges and no overnight holdings)
• All terms and conditions are known prior to trading (terms and conditions are spelled out and known to traders – this reduces garnishment).
• Only real assets such as gold are traded, which are backed by physical assets.

Is gold trading halal or haram in Islam?

In order to understand whether trading gold on MT5 is halal or haram, it is necessary to understand the Islamic principles that are obligatory for gold trading. In Islam, trading is allowed if it meets the standards of religion and ethics.

One should pay attention to the fact that the asset should not contain elements of Riba (usury) or gharar (uncertainty). The gold should be based on a real (physically existing) asset. And also the transaction must be protected from harmful consequences to the parties involved in the transactions.

Gold has been traded throughout human history and has gained a major role in Islamic finance. In Islam, gold is considered a commodity and not money and if gold trading meets all of the above standards, then it is halal.

It is important to realize that if gold trading involves the possibility of physical receipt, then the transaction complies with the principles of Shariah. But if online gold trading in MetaTrader 5 involves speculation, further analysis is required to determine if it is Shariah compliant.

MetaTrader 5 Gold Trading and Shariah Compliance

Gold trading on MT5 is done using derivatives, namely Contracts for Difference (CFDs). CFD is speculating on price movements without actually owning the asset.

CFDs are one of the popular tools for trading, but one has to wonder if they are Shariah compliant when trading gold on MT5?

Some Muslim scholars suggest that CFD trading contains elements of gharar. However, other Muslim scholars argue that CFD trading is permissible because they involve a genuine economic purpose and are settled over a period of time.

To determine whether trading gold in MetaTrader 5 using CFDs is halal or haram, we need to consider the criteria set by the Sharat scholars.

Usury or Riba

Receiving or paying interest is forbidden in Islam. Gold trading in MetaTrader 5 does not require borrowing or lending to anyone. Traders can open positions and hold them for as long as needed, and they can close them at any time without paying or receiving any hidden interest.

Gharar, uncertainty or risk

Garar or high risk in trading is forbidden and haram, and some scholars believe that CFDs have elements of garar. 

However, other scholars believe that CFD trading is not speculation but depends on the real market price. Gold trading on MT5 takes place in an established market and is minimally exposed to fluctuations and risks (compared to other assets).

Real asset

Gold on MT5 is a real asset and this is an important point in Shariah regulations. In an ideal gold trade, it should be possible to physically deliver the gold asset and in such a case such a trade is halal.

Gold trading in MetaTrader 5 is halal

Having studied the rules of Islam regarding trading, we can conclude that trading gold on MetaTrader 5 using CFDs is halal and complies with Shariah law. Since the asset being traded must be a real asset and gold is a real asset and CFDs are allowed, such trading can fit the principles of trading.

As in all trading, it is important to exercise care and caution and only trade with funds you can afford, in addition to Muslim traders should adhere to their religious values in all aspects of life.

Frequently Asked Questions (FAQ)

Can trading on MetaTrader 5 be considered halal?

Trading on MetaTrader 5 on an Islamic (Muslim) account can be considered halal if the rules and principles of Shariah are observed.

Is trading XAU/USD on MetaTrader 5 halal?

Many Muslim scholars believe that trading gold (XAU)/USD can be considered halal if it does not violate the principles of Islam.

What to do to avoid usury (riba) in gold trading?

In order to avoid gold trading as usury and not violating Shariah rules, you should use a special Islamic (where no interest is charged or paid) account without swaps.

References:

• https://www.islamicfinanceguru.com/articles/what-is-a-halal-investment-2
• https://ask.ghamidi.org/forums/discussion/86236/
• https://forums.babypips.com/t/is-forex-trading-halal-in-islam/611055/10