Collecting the Modern Gold Dinar in the Secular World
In a very interesting development, the government of Malaysia became the first nation in modern times to coin a pan-Islamic coin. This re-crafted and reissued coin of antiquity, called the Islamic Gold Dinar (IGD), has proven proven attractive to all who buy gold bullion coins for interest or profit, no matter their spiritual affiliation or location.
The historical significance of such a coin cannot be denied. The gold Dinar was first minted by the Persian Empire in the 5th century BCE. However, one has to fast-forward to the time of the caliphate, around 700AD to find coins that depict a sitting ruler and a date that can be identified.
The modern resurrection of the gold Dinar has several purposes. For starters, it is meant to be an alternative to the dollar to be used in the Islamic world of Southeast Asia and the Middle East. Furthermore the money that is traded in these gold coins is not subject to the usual interest rates and fee profits that are built into the law. For those who buy gold bullion coins as an investment in the Americas or Europe, the best way to find these still scarce coins that have only been in major production since late 2006.
There are many reasons why a pan-Islamic coin is of historical interest, but as a mater of practicality, the gold Dinar is made from 0.15-ounce (4.25g) of 22-karat gold that is highly collectible by on both the numismatic markets as well as hundreds of millions of followers of Islam found worldwide.
They are taken as currency to be hoarded for troubled times, but gold Dinars also may be used as a dowry payment, a payment in an ordered Sharia judgment or when tithing to the poor. For those who buy gold coins for such an occasion to use gold Dinars ensures that they are circulated within the Islamic World. However, for those who invest in gold coins of interest from a vantage point in the West, the Dinar remains very collectible due to its scarcity.
First made on a very limited scale in 1992, even these first few coins took nearly a decade to go from an idea by Professor Omar Ibrahim Fadillo. As the founder of the Morabeteen International Organization that advocates for a united Muslim world based upon a common currency (not unlike the unification of Europe under the Euro). The use of gold goes back thousands of years as a stable type of currency that is sanctioned by many passages in the Qur'an.
In fact, for those who buy gold bullion coins from emerging gold producing countries, Malaysia is one country to keep an eye on. They have not only drastically increased the amount of gold that is produced, but it is one of the major expanding gold markets to watch, especially as the interest in the gold Dinar has spurred investment in gold mining technology in Malaysia.
In terms of strictly market oriented gold coin investments, the gold Dinar remains more of a collector's coin in the West. For the billions of dollars of oil wealth that are preferentially invested in Islamic organizations and development, there are even electronic gold Dinar funds (similar to a Western gold ETF, but without the same sort of fee structure) that the devout use in the very same manner as physical gold coins.
Sam Brown
April 4, 2009
