Valuing gold for Zakat calculation - Average price or Period end price

Question

The price of Gold changes a few times a minute as such over a year it can and does fluctuate considerably for example the closing price for gold every approx 30 days for the last year is below.

DATE PRICE £/Gram
25/06/2011 31.89
25/07/2011 35.82
24/08/2011 36.40
23/09/2011 33.09
23/10/2011 34.52
22/11/2011 33.10
22/12/2011 34.41
21/01/2012 35.13
20/02/2012 33.44
21/03/2012 32.87
20/04/2012 32.38
22/05/2012 31.96

AVERAGE 33.75

The average is higher at £33.75/gram then the last price on 22/05/2012 of £31.96/gram.

For the purposes of Zakat would it be better to use the average price or the current price (assuming that I had paid Zakat on 22/05/2012) to work out the value to use for Zakat purposes.

Mufti Faisal bin Abdul Hameed · Accepted Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

According to Hanafī Madhab zakāt on the gold or silver is calculated at its current spot rate on the day of discharging the zakāt. [1]

We understand that your assertion to choose the average price over the year is with the good intention of discharging zakāt at a higher rate to err on the side of caution. In the example which you have provided the average rate is higher than the opening rate, however should the value of gold plummet during the term and then regain strength by the end of the year, the same average would be lower.

And Allah Ta’āla Knows Best

Mufti Faisal bin Abdul Hameed,
Montréal, Canada

Checked and Approved by,
Mufti Ebrahim Desai.

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