All perfect praise be to Allah, The Lord of The Worlds, and may His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

It is forbidden to exchange gold for gold with paying a sum of money, no matter how small it is. This is because selling gold for gold is forbidden except equal for equal. Abu Sa`id Al-Khudri and Abu Huraira narrated: "Allah's Messenger (PBUH) appointed somebody as a governor of Khaibar. That governor brought to him an excellent kind of dates (from Khaibar). The Prophet (PBUH) asked, "Are all the dates of Khaibar like this?" He replied, "By Allah, no, O Allah's Messenger (PBUH)! But we barter one Sa of this (type of dates) for two Sas of dates of ours and two Sas of it for three of ours." Allah's Messenger (PBUH) said, "Do not do so (as that is a kind of usury) but sell the mixed dates (of inferior quality) for money, and then buy good dates with that money."{Agreed upon}.

As for the goldsmith`s wages, it is forbidden to add them to the bought gold because any addition-if the exchanged items are from the same kind- is excess usury(Riba al-Fadel).

Al-Imam Ashafii said, "It isn`t acceptable to exchange silver for an equal amount of shaped silver ornaments from the goldsmith`s shop along with giving him the goldsmith`s wages since this way the exchanged items become unequal."{Al-Umm(3/35}.

In conclusion, it is possible to exchange gold for equal gold from the goldsmith`s shop, then pay the latter a wage-agreed on by both parties-to shape it. It is also possible to sell gold for cash, then buy new gold with it. And Allah knows best.