Buying and selling gold for profit?

I would like to know if it is permissible to buy and sell gold for profit. My understanding in the past has been that transactions where a certain amount of gold is purchased at one price and the same amount sold at another (higher price) are not permissible as the money comes into the category of riba. Is this correct? I have an opportunity to buy into GOLD index fund. These are funds/stocks that are based purely on the price of gold. The price of these funds will fluctuate depending on the price of gold. Am I allowed to invest in such funds?

Assalamu alaykum

In the name of Allah the Inspirer of truth.

It is permissible to by and sell gold, since you will be buying it for cash [i.e. money] and not for gold. Both gold and currency [notes and coins in use today] are considered to be from different genuses and hence can be traded for each other without the need of them being equal in value or without the fear of usury.

What is unlawful is to trade gold with gold or silver with silver when there is more gold or silver on one side. For example a 2 oz gold biscuit can not be traded for a 1.8 oz gold necklace. Although the necklace would probably cost more money than the raw gold if you went to purchase it in the stores, but the value of the design is not taken into consideration when trading it with gold. Likewise is the issue when trading silver wit silver. However, when trading it for something else there can be a markup.

And Allah knows best.

Wassalam

Abdur-Rahman Mangera