'Abdullah (b. 'Umar) went and I along with the person belonging to Banu Laith entered (the house) of Sa'id al-Khudri, and he ('Abdullah b. Umar) said: I have been informed that you say that Allah's Messenger (ﷺ) forbade the sale of silver with silver except in case of like for like, and sale of gold for gold except in case of like for like. Abu Sa'id pointed towards this eyes and his ears with his fingers and said: My eyes saw, and my ears listened to Allah's Messenger (ﷺ) saying: Do not sell gold for gold, and do not sell silver for silver except in case of like for like, and do not increase something of it upon something, and do not sell for ready money something, not present, but hand to hand.
The Book of Musaqah - Sahih Muslim 1584 b
In the name of Allah, the Most Gracious, the Most Merciful. This narration from Abu Sa'id al-Khudri (may Allah be pleased with him) establishes one of the fundamental principles of Islamic commercial law regarding riba al-fadl (the excess in exchange of specific commodities).
Prohibition of Riba in Gold and Silver
The Prophet (ﷺ) explicitly forbade the exchange of gold for gold or silver for silver unless it is equal in weight and hand-to-hand. This prohibition applies to these precious metals whether they are in coinage, bullion, or manufactured form.
The wisdom behind this prohibition is to prevent any form of usury or unjust enrichment that may occur when these standard monetary commodities are exchanged with disparity in quantity or with delayed payment.
Conditions for Permissible Exchange
Two conditions must be met for the exchange of gold for gold or silver for silver to be lawful: equality in weight (mithlan bi-mithlin) and immediate exchange (yadan bi-yadin). The phrase "do not increase something of it upon something" emphasizes the requirement of exact equivalence.
The prohibition extends to selling "something not present but hand to hand" meaning that deferred payment or credit transactions in such exchanges are forbidden, as they open the door to riba.
Scholarly Consensus and Application
The classical scholars are unanimous that this hadith establishes gold and silver as two of the six ribawi items mentioned in the Prophetic tradition. The ruling applies regardless of the form - whether jewelry, coins, or raw metal.
This prohibition forms the basis for modern Islamic finance principles regarding currency exchange and precious metal trading, ensuring justice and eliminating exploitation in financial transactions.