3.The oil-rich Gulf countries’ reserves range from 0.84 ounce of gold per
citizen (Kuwait—79 tonnes) to 0.28 (Qatar—12.4 tonnes) and 0.18
(both Saudi Arabia—143 tonnes, and Bahrain—4.7 tonnes)
4.In many of the countries with a growing Islamic banking presence, we
find the following reserves in tonnes and in ounces of gold per capita:Does the official per capita gold reserve reflect—along with other cur-
rency reserves—the economic affluence of a country? This is a question that
should be researched in terms of many factors, such as the countries’ mone-
tary policies, the contents of the reserves in foreign currency, and the nomi-
nal gross domestic product of the countries in terms of their local currencies
and how they relate to the exchange rates.
It is believed that the solution is not returning to the gold standard, as
some may advocate, but to reflect on the purchasing value of the convenient
fiat money in each of the local economies by using the Shari’aa-based com-
modity indexation rule presented in this book.
The History of Gold Markets and Prices
It is interesting to note that the gold futures market is one of the smallest
volume markets in the world. Because it is so small, it can be extremely
volatile when exposed to massive short-sale activities. The short position in
gold, via derivatives, is the one of the larger positions in the world.
As shown in the gold price chart in Exhibit 5.18, the price of gold stayed
relatively stable (and in some periods declined) between the early 1980s and
- This has been mainly due to the central banks of many of the worlds’
countries selling their gold on paper, and using many commodity-trading
Tonnes of GoldApproximate per
Capita Oz/Citizena. Lebanon 286.8 2.19
b. Algeria 173.6 0.16
c. Iran 302.3 0.14
d. Jordan 14.8 0.08
e. Turkey 116.0 0.05
f. Malaysia 36.4 0.04
g. Egypt 75.5 0.03
h. Indonesia 73.1 0.01
i. Pakistan 65.4 0.01
j. Bangladesh 3.5 Negligible124 THE ART OF ISLAMIC BANKING AND FINANCE