The government is considering using some of its gold reserves to bail out the banks and pay back depositors who got wiped out. But doing so would not only go against historical precedent, but also violate a 1980s-era law. Meanwhile, those depositors would like to make up some of their losses by buying gold and silver, hoping that prices will bounce back from the downturn of recent days and hit new highs.<\/p>\n
Lebanon\u2019s untouchable asset<\/p>\n
At one point, the value of Lebanon\u2019s gold reserves reached $50 billion \u2014 over double the country\u2019s own GDP. After years of economic crisis, and pushback against meaningful reforms to make the country viable again, some are again raising a sensitive question: Is it finally time to dig into this goldmine?<\/p>\n
\t A senior banking official told The Associated Press that some banks are proposing to dig into the gold reserves to help\u00a0pay back depositors\u00a0whose money was lost during the country\u2019s currency crisis, essentially partially bailing out the banks with the country\u2019s only viable public asset. The officials spoke on condition of anonymity in line with regulations.<\/p>\n Lebanon banned the sale of its gold in 1986 in the middle of the country\u2019s civil war to protect state assets during a time of extreme instability. The gold reserves have never been touched \u2014 not after the 15-year civil war ended in 1990, and not after multiple wars between Hezbollah and Israel.<\/p>\n Some economists have proposed using a small percentage of the gold, in tandem with wholesale reforms, to fix Lebanon\u2019s ailing electricity sector or to breathe life back into the country\u2019s devastated education and healthcare system for the public good. Parliament would have to vote to allow the use of the gold reserves in any capacity. It\u2019s a largely unpopular move that is not expected to be made anytime soon, especially months before general elections.<\/p>\n When gold was brought up in a session last week, Speaker Nabih Berri quickly interjected to shut down the conversation. \u201cNot feasible,\u201d he said sternly. A draft fiscal gap law that offers a framework of returning some depositors\u2019 losses is languishing in parliament amid a debate over who would absorb the losses: Lebanon\u2019s battered banks, largely reluctant to hold themselves accountable, or an indebted and wasteful state.<\/p>\n \t Most Lebanese distrust the authorities, who for years have dodged implementing meaningful reforms to fight corruption, reduce waste, and improve public services. Given that track record, many say the gold should remain untouched for future generations.<\/p>\n Softening the financial blow<\/p>\n While authorities debate the future of the country\u2019s gold, many Lebanese depositors who lost most of their savings in the banks are now turning to gold and silver themselves to own something more tangible while hoping it might even make up for some of their losses.<\/p>\n Crowds of people were lined up outside of Lebanon\u2019s key metals trader on the northern outskirts of Beirut on a recent day, desperate to get inside and buy gold and silver coins, medallions, and bars. They no longer trust the banks and are trying to get by in the middle of a messy cash economy beset with uncontrollable inflation and no meaningful reforms on the horizon.<\/p>\n \u201cFor those making up for losses, gold is not a safe haven \u2014 it\u2019s the only haven,\u201d said Chris Boghos, the managing director of Boghos SAL Precious Metals. Business is booming, as customers are now paying in advance to get their metal months later due to high demand.<\/p>\n \t Lebanon has had a troubled history in a volatile region, with\u00a0numerous conflicts\u00a0and economic shocks, and little trust that the structural issues will change.<\/p>\n \u201cThere has always been this propensity for the Lebanese people to go buy up gold in order to hedge against possible inflation, because this is a country that has seen multiple episodes of hyperinflation during its history,\u201d said Sami Zoughaib, an economist at Beirut-based think tank The Policy Initiative.<\/p>\n Zoughaib says it\u2019s an easy shift as well, given the long tradition in the region of a groom or his family giving gold jewelry to the bride ahead of marriage as her own wealth, even among lower-income families. That tradition still largely continues even as many women have entered the workforce.<\/p>\n Outside one of Beirut\u2019s gold markets Alia Shehade strolls along some of the storefronts. She says as a woman, her gold jewelry collection has made her feel safe in the middle of the financial crisis, referring to an Arabic saying that translates to \u201can adornment and treasure.\u201d<\/p>\n \u201cIf a woman is in a tough situation \u2026 she can sell her gold. And when gold prices go up, then she\u2019s the winner,\u201d she said. But she refuses to sell any of hers.<\/p>\n When looking at the reluctance to sell gold among both the citizens and the authorities, Zoughaib said, \u201cI think this just tells us just how important that gold is in the psychology of people.\u201d<\/p>\n \u201cThey are not even able to imagine a use case for it beyond being a hedge,\u201d he said.<\/p>\n
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\n\t\tA couple checks out pieces of gold at a shop in Beirut, Lebanon, February 2, 2026. (AP Photo\/Bilal Hussein)<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/AFP__20250109__36TC836__v3__HighRes__LebanonPoliticsVotePresident-e1736533816756-640x400.jpg\")
\n\t\tLebanon\u2019s Parliament Speaker Nabih Berri chairs a parliamentary session to elect a president, in Beirut, January 9, 2025. (Anwar Amro \/ AFP)<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/AP26034367338982-e1770369829943.jpg\")
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\n\t\tPeople wait in line to buy gold and silver ounces at a gold and silver trader in the Beirut suburb of Bourj Hammoud, Monday, February 2, 2026. (AP Photo\/Bilal Hussein)<\/p>\n
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