Zakat on Gold
Zakat on gold becomes due once a person's gold holdings reach the nisab threshold — the value of 87.48 grams of pure gold — and have remained at or above that threshold for one full lunar (Hijri) year. Below that threshold, no zakat is owed on gold regardless of how long it's been held; above it, 2.5% of the gold's current market value is due, calculated using the price at the time zakat is due rather than what was originally paid for it.
The nisab figure itself is worth understanding rather than just memorizing: it derives from a hadith specifying the threshold in terms of gold dinars (20 dinars), which has been converted by scholars into a modern gram equivalent — 87.48 grams — using historical weight standards for the dinar coin. Because gold's market price changes daily, the practical zakat calculation isn't "87.48 grams is worth X, so pay X" as a fixed number; it's recalculated at whatever the current gold price is on the date zakat is assessed, which is one of the reasons an accurate, current price source matters for getting the number right.
Gold used as everyday jewellery is where the clearest disagreement between schools of thought shows up. The Hanafi school holds that zakat is due on gold jewellery just as it is on gold held as savings or investment, regardless of whether it's worn regularly — the reasoning being that gold retains its status as a form of wealth (mal) even when shaped into jewellery. The Shafi'i, Maliki, and Hanbali schools generally hold that jewellery genuinely used for permissible personal adornment is exempt, reasoning that its function has shifted from "stored wealth" to "a used possession," similar to clothing or furniture. Given the size of this difference, following one's own school of thought's position — or a scholar's specific ruling — on this particular point matters more than it does for most zakat questions, since it can be the difference between owing zakat on a wedding set and not.
For gold combined with other assets — cash, stocks, business inventory — the general method most scholars use is to combine the value of all zakatable assets together and check that combined total against the nisab threshold, applying 2.5% to the combined sum, rather than checking gold against its own separate threshold in isolation.