Lebanon Weighs Selling Gold Reserves (LBX) to Bail Banks Amid Political Resistance

Lebanon, grappling with deep inflation, banking collapse and political stagnation, is considering selling a portion of its 286-tonne (~9 million oz) central bank gold reserve valued at up to $50 billion (€42.4bn) to recapitalize failing banks and reimburse depositors. The 1986 ban on selling gold remains in force, though some depositors and economists see the reserves as a potential lifeline amid a $70 billion (€59.4bn) banking loss and $11 billion (€9.3bn) in Israeli-Hezbollah war costs. Gold prices have risen to $5,354 (€4,540) and then retreated to $4,540, reflecting geopolitical uncertainty and expectations of lower U.S. interest rates. Global central banks have driven much of the buying, while silver prices surged on industrial demand and a cheaper price. Any sale would require parliamentary approval and is unlikely soon, with Speaker Nabih Berri blocking discussion last week. The government seeks to balance returning deposits with avoiding precedent and addressing systemic corruption. In the meantime, public demand for gold and silver is surging as a cashless, inflation-hedging asset, with traders reporting prepayment for months of supply.