Middle East and OPEC nations may be the first to bring a return to gold standard

With China, Russia, and the BRICS nations all accumulating vast physical gold reserves over the past four years, there has been a great deal of speculation on whether this coalition, or an individual from the five nation economic pact, would choose to one day backstop their currency with their metal holdings. And the creation of the AIIB, CIPS, and Shanghai Gold Exchange (SGE) by China has done little to deter this belief.

But a new economic bloc may be planning a return to a gold standard even sooner than the BRICS, and the idea is coming from a sect of people that are nearly two billion strong under the banner of Islam.

On May 3 the World Gold Council (WGC), together with Kuala Lumpur-based Amanie Advisors, have begun planning the implementation of a gold standard under Sharia Finance, and to create a mechanism for the usage of gold in financial and investment transactions for Islamic financial institutions and participants.

London-headquartered World Gold Council (WGC), together with Kuala Lumpur-based Amanie Advisors, an independent advisory firm on Shariah investments and the Accounting and Auditing Organisation for Islamic Financial Institutions in Bahrain, now have been developing a “Shariah Standard on Gold” which aims at “providing guidance from the Shariah perspective on the usage of gold in financial and investment transactions for Islamic financial institutions and participants,” as WGC head Natalie Dempster puts it.

The standard also aims to increase transparency and harmonisation of the use of gold investments and reduce unclear specifications on what’s haram and what’s halal in trading the metal. – Gulf Times

Last month, the largest oil producer in OPEC hinted at the need to create a new financial project that would allow Saudi Arabia to wean itself off of energy production as being their primary source of revenue and income. And with OPEC countries like Nigeria and Iran already selling their oil in currencies other than the dollar, this initiative, along with a move back towards gold money, may be a necessary step in filling the void of the dying petrodollar standard that has controlled global economy for over 40 years.

China, Russia, and now Islam are all pushing hard for a return to gold as money rather than simply a commodity, and a return to asset based finance after years of purely fiat currencies. And the likelihood of a return to the gold standard in some form is becoming more and more an inevitability now that the leaders of an entire bloc of people who encompass over 25% of the global population is close to making gold a religious mandate.

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