WHY DO WE SHOULD INVEST IN GOLD?

image source: plazadinar.com

Gold! One of the most popular investment instrument and it's zero-inflation! It means, inflation can't "eat" your money if you invest it in gold. As we know, money keeps devaluing in line with the inflation rate's change. As an Indonesian, I still remember when I was in elementary school, I can buy four candies with 100 rupiahs. Now, I think we all know that we can't afford candy at such price.

Some says that gold keeps moving up when the rate of inflation rises as well. Look at the graphic below! We can see that the price of gold keeps rising year on year.

But, the price is always fluctuating actually. And based on the latest data (March 22nd) by AGEA, gold touches UDS 1613 per troy ounce.

There's one certain thing you have to know. "Troy ounce" is a international standard unit to measure the weight of gold. In Indonesia, "gram" is the standard unit to measure it and here is the formula for converting Troy Ounce to Gram: 1 Troy Ounce is equal to (approximately) 31 grams. Let's consider the price of gold is USD 1.600 per troy ounce or USD 1600 for 31 grams. If USD 1 = IDR 9700, then it will be IDR 500645 per gram.

And what are the types of traded gold?

1. Dinar gold. It's the most expensive type in Indonesia.
2. Gold bar

3. Gold medal.

Does Islam let us to trade gold? YES, of course!

Islam definitely forbids us to "touch" interest (it's often called riba). Riba isn't involved in gold and forex trading, but islam will ban us to trade them if we don't receive the object in cash. Sounds simple but it's not that simple. For all moslem in whole world, all kinds of investment always have risk; economic risk and religion one.

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