From the viewpoint of Shariah, gold and silver are a medium of exchange and as such cannot be sold forward. Although the primary business activity of gold/silver mining companies does comply with Shariah principles; these companies are not permitted to sell their gold/ silver stocks forward for hedging purposes.

Look out for:

1). Exploration stage companies which have no revenues but have hedged their future production of gold/silver are not compliant

2). Companies having a derivative loss, but having hedged more than 1/3rd of their gold/silver production are not compliant