Dubai: A new Sharia benchmark for the use of gold in financial transactions could be ready as early as the first quarter of 2016. This follows the World Gold Council and Amanie Advisors, a specialist consultancy, opening up submissions from industry participants on what the standard should be. Submissions need to be made by December 31.

The ‘Standard will provide guidance from a Sharia perspective on the usage of gold in financial and investment transactions for Islamic financial institutions and participants,’ the WGC states on its website. ‘The Standard also aims to increase transparency and harmonisation regarding the use of gold in various market practices.’

But the proposed Standard “does not cover the sourcing of gold … instead it will provide clarity on gold’s use in financial services and harmonise the relevant rules across markets, thereby creating greater access to gold,” said Natalie Dempster, Managing Director, Central Banks and Public Policy, WGC.

According to a Dubai based analyst, “The attempt seems to be to spark buying from Islamic financial institutions, by making futures contract Sharia-compliant. This attempt at channelling liquidity will likely have an impact over time … as currently gold prices are weighed down by the resurgence of the dollar and prospects of higher interest rates.”

In a statement, Dr. Mohammad Daud Bakar, Chairman of Amanie Advisors, said: “Gold has a unique status in Islam, but the existing Islamic standards for gold are fragmented, hampering product development and market demand. The Sharia Standard on Gold … will provide clear guidance on gold to individuals and institutions.”