It is not permissible to exchange old gold for new gold and pay the difference in value

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Is it permissible to exchange old gold for new gold, and pay the difference in value to the goldsmith?.
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Answer:
Praise be to Allaah.

It is not permissible to exchange worn-out gold for good gold and pay the difference. This is haraam and is not permissible. That is indicated by the reports proven in al-Saheehayn and elsewhere in the story of Bilaal (may Allaah be pleased with him), who brought some good dates to the Prophet (peace and blessings of Allaah be upon him) and he said to him: “Where did these come from?” Bilaal said: “We had some bad dates and I paid two saa’s of them for a saa’ so that the Prophet (peace and blessings of Allaah be upon him) might have some of it.” The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “Oh! Do not do that, (it is) the essence of riba, the essence of riba.” Narrated by al-Bukhaari, 3212. 

The Messenger (peace and blessings of Allaah be upon him) stated that giving more when equal amounts should be exchanged because of the difference in quality is the essence of riba, and it is not permissible to do that. But the Messenger of Allaah (peace and blessings of Allaah be upon him), as was his wont, pointed out the permissible way. The Prophet (peace and blessings of Allaah be upon him) told him to sell the bad dates for money (dirhams) and then buy the good dates with the money. 

Based on this we say: If a woman has some worn-out gold or gold that people no longer wear, she can sell it in the market and take the money, then buy good gold of her choosing. This is the way taught by our Prophet (peace and blessings of Allaah be upon him), 

Whatever written of Truth and benefit is only due to Allah's Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.

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