Are Gold and Silver ETFs Halal? The 2026 AAOIFI Verdict on GLDM, IAU, SLV + Canadian Options

With gold trading north of US$4,000 per ounce in June 2026, more Canadian Muslim investors are asking the same question: can I own gold through an ETF, or does Shariah require the physical bars? The answer is more favourable than most people expect — but it is conditional, and the conditions knock out entire categories of funds. Unlike broad equity ETFs such as XEQT, which fail screening because of what their holdings do, gold ETFs are judged on what they are: vaulted metal, or paper claims dressed up as metal.

Why Gold ETFs Are Screened Differently Than Stock ETFs

Gold and silver are ribawi commodities — they fall under the classical exchange rules from the hadith of the six items (gold, silver, wheat, barley, dates, salt). Exchanging gold for currency requires spot settlement and actual possession; deferred or speculative paper claims on gold are riba al-nasiah. That is why the equity screening framework — the AAOIFI Standard 21 tests of business activity and financial ratios — does not apply here. A bullion trust has no revenue, no debt, and no business activity to screen. The question is purely structural: do you actually own gold?

AAOIFI answered that question in 2016 with Shariah Standard No. 57 on Gold and its Trading Controls, developed in collaboration with the World Gold Council and endorsed by a board of 20 scholars including Sheikh Yusuf DeLorenzo and Dr. Mohd Daud Bakar. Standard 57 is the reason Shariah-certified physical gold ETFs exist at all.

The Five AAOIFI Standard 57 Conditions — and What They Mean for an ETF

The Standard sets out five core principles. Here is each one, translated into what it requires from an exchange-traded product:

Principle 5 is the one most people miss. The trust structure used by the major bullion ETFs — thousands of investors each owning an undivided fractional interest in a pool of allocated bars — is not a workaround that scholars grudgingly tolerate. It is expressly contemplated by the Standard. The screening question collapses to: is the metal real, allocated, and unencumbered?

The Verdict, Ticker by Ticker

GLDM: the structural pass at the lowest fee

GLDM is the fund people search most, and the answer is straightforward on structure. The SPDR Gold MiniShares Trust holds allocated physical gold bars in the custody of JPMorgan Chase Bank, N.A., charges a 0.10% gross expense ratio — the cheapest of the major bullion funds — and holds nothing else. No futures. No leverage. No lending overlay. Each share is an undivided beneficial interest in the trust's gold, which is precisely the joint-ownership structure principle 5 permits. GLDM does not carry its own Shariah certificate, so the prudent step is a screener check on Musaffa or Zoya before you buy — but on publicly reported structure, it satisfies the conditions that Standard 57 actually tests.

The iShares physical gold question: IAU vs. the certified ETC

Two different iShares products get conflated here. IAU — the iShares Gold Trust on NYSE Arca — is a grantor trust holding physical gold at a 0.25% expense ratio. Structurally sound, but not formally certified. The iShares Physical Gold ETC (ticker SGLN, London Stock Exchange) is a different product, and it is certified: BlackRock states the securities are compliant with Shariah investment principles, and its Shariah Supervisory Board issues an annual compliance certificate — the one covering the April 2024 annual report was issued August 10, 2023, renewed yearly. If a standing scholarly certification matters to you more than a screener rating, SGLN is the gold product that has one. The practical problem is access: most Canadian brokerages do not offer London-listed ETCs, which pushes Canadians back to GLDM, IAU, or the TSX options below.

Silver: no dedicated AAOIFI standard, same rules by analogy

AAOIFI has not published a silver equivalent of Standard 57. That gap shows up in search results and Reddit threads as uncertainty, but the fiqh is not actually uncertain: silver is a ribawi commodity under the same hadith as gold, and scholars apply the identical possession and allocation rules by direct analogy. The market has already operationalized this — the Invesco Physical Gold and Silver ETCs in London carry annual Shariah compliance certification from Amanie Advisors, meaning credentialed Shariah boards have signed off on physically backed silver products, not just gold. For North American access, SLV holds physical silver in a grantor trust at a 0.50% sponsor fee, and PSLV holds fully allocated silver at the Royal Canadian Mint with units redeemable for physical bars. Both meet the structural conditions. Silver futures funds and leveraged silver plays do not.

The Canadian-Listed Options: PHYS, PSLV, MNT — and a Caution on CGL

If you want to avoid US-dollar conversion costs and hold bullion on the TSX, the Canadian lineup is arguably stronger on Shariah structure than the US one:

The CGL and SVR caution is the part most halal-investing lists skip. The bullion inside those funds is real and physically held. The problem is the currency hedge: the CAD-hedged series overlay conventional currency forward contracts to strip out USD/CAD movement, and a forward is a deferred currency exchange — exactly the kind of contract most Shariah boards exclude. If you want TSX-listed gold, the cleaner choices are PHYS, MNT, or the unhedged series. MNT deserves a special mention: it is not a fund at all but an exchange-traded receipt granting direct beneficial ownership of gold held at the Mint, redeemable monthly for physical bullion, with the Mint's obligations backed by the full faith and credit of the Government of Canada. As a pure expression of "allocated gold with a confirming certificate," it is hard to beat.

What Fails the Screen — Four Categories to Avoid

• Futures-based commodity funds. These hold exchange-traded derivatives, not metal. There is no allocated gold to possess, and the underlying contracts are deferred-delivery instruments — a direct violation of the spot-trading principle.
• Leveraged and inverse bullion funds. Leverage is built on borrowing and swap agreements. Both fail independently, regardless of what the fund tracks.
• Currency-hedged series (CGL, SVR). Real bullion, non-compliant forward overlay, as covered above.
• Unallocated gold accounts and bank certificates. An unallocated account makes you an unsecured creditor of the bank — you own a claim, not bars. This fails the full-allocation requirement even though it is marketed as "owning gold."

Gold miner ETFs like XGD are a separate analysis entirely — they hold mining company shares, so they get the Standard 21 equity screen (5% impermissible revenue, 30% debt-to-market-cap, 30% cash-plus-interest-securities, 5% impermissible income), not Standard 57. Mining itself is permissible, but capital-intensive miners routinely breach the 30% debt ratio, and the unscreened basket will hold failures at any given time. Screen individual miners if you want that exposure; do not assume the sector ETF passes.

The Honest Gray Area: T+1 Settlement

One unresolved debate deserves daylight rather than burial in a footnote. When you buy GLDM or PHYS on an exchange, the trade settles next business day (T+1 on North American markets). Standard 57 requires spot exchange, and principle 4 contemplates allocation through T+0 settlement or a certificate confirming bar ownership. The majority position — reflected in the certifications issued for the London physical gold ETCs — is that your beneficial interest in already-allocated, already-vaulted gold transfers at settlement, satisfying constructive possession: the gold never exists as a deferred promise, only the share transfer takes a day. A stricter minority of scholars holds that any settlement delay in a gold-for-currency exchange is impermissible. If you follow a scholar in the stricter camp, MNT's direct-receipt structure or physical bullion purchased with same-day delivery is the conservative route. For most investors following mainstream AAOIFI application, the allocated ETFs are acceptable. This is a genuine difference of scholarly opinion, not a loophole — know which view your own scholar takes.

Where Bullion Fits in a Halal Portfolio — Accounts, Tax, Zakat

A compliant gold fund solves a real problem for Canadian Muslim investors: GICs, bonds, and HISAs are all interest-bearing and off the table, which leaves halal portfolios heavily equity-concentrated. A 5-15% allocation to allocated bullion is one of the few Shariah-clean diversifiers available — it held its purchasing power through 2024-2026 while paying no riba. It also pays no income at all, which is the trade-off: gold compounds nothing and costs 0.10-0.51% a year to hold, plus a recurring 2.5% zakat obligation on the full market value once you are past the nisab (85 grams of gold). On a $50,000 position, that is $1,250 of zakat every lunar year — a real drag that argues against oversized allocations.

On the tax side, hold compliant bullion funds inside registered accounts first. The TFSA gives you $7,000 of new room in 2026 ($109,000 cumulative if you have been eligible since 2009) and fully tax-free gains — our halal TFSA guide covers the account mechanics. The RRSP shelters up to $33,810 of 2026 contributions. In a non-registered account, capital gains face 50% inclusion: a $100,000 gain produces $50,000 of taxable income, roughly $26,765 of tax at Ontario's top combined rate of 53.53%.

For the equity side of the portfolio, pair the bullion sleeve with purpose-built Shariah equity funds — our ranked list of the best halal ETFs in Canada covers WSHR (0.50%), HLAL (0.50%), and SPUS (0.45%), and the full halal ETF hub maps the whole landscape. If you would rather not assemble it yourself, Wealthsimple's halal managed portfolio runs roughly 0.9-1.0% all-in and handles the screening for you.

The Bottom Line

The question "are gold ETFs halal" has a better answer than most halal-investing questions: yes, when the fund holds fully allocated physical metal and nothing else. GLDM at 0.10% is the cheapest structural pass; IAU and SLV share the same grantor-trust architecture; the iShares Physical Gold ETC carries an actual annual Shariah certificate; and the Canadian-listed PHYS, PSLV, and MNT add Royal Canadian Mint vaulting and physical redemption rights that arguably express Standard 57's intent better than any US fund. Avoid the four failure categories — futures, leverage, currency-hedged series, unallocated accounts — and verify the specific fund on Musaffa or Zoya before you buy, because structures and overlays change.