Cash-strapped Lebanon finds itself sitting on a gold mine, as precious
metal prices surge
[February 06, 2026] By
KAREEM CHEHAYEB and MALAK HARB
BOURJ HAMMOUD, Lebanon (AP) — Tiny Lebanon sits on one of the largest
gold reserves in the Middle East and its government is weighing whether
it can use that stockpile to restore a crippled economy while its
citizens are looking at gold as a way to protect their battered assets.
Lebanon’s economy hobbled into 2026 with ongoing inflation and state
decay and no reforms to combat corruption in sight. Its banks collapsed
in late 2019 in a crippling fiscal crisis that evaporated depositors’
savings and plunged about half its population of 6.5 million into
poverty, after decades of rampant corruption, waste, and mismanagement.
The country suffered some $70 billion in losses in its financial sector,
further compounded by about $11 billion in the 2024 war between Israel
and the Hezbollah militant group.
The price of gold recently soared to an all-time high of $5,354, before
dropping back below $5,000, sparked by geopolitical instability and
questions surrounding U.S. President Donald Trump’s desire to lower
interest rates that would ultimately devalue the dollar. Global central
banks have been among the most avid buyers. Silver prices meanwhile have
also surged due to industrial demand and the attractiveness of a much
cheaper price than gold.
The central bank in Beirut has maintained a reserve of 286 tons of gold
- some nine million ounces - since the 1960s. Only Saudi Arabia’s
central bank holds more in the region.
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.
Lebanon’s untouchable asset
At one point the value of Lebanon’s gold reserves reached $50 billion —
over double Lebanon’s 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?
A senior banking official told The Associated Press that some banks are
proposing to dig into the gold reserves to help pay back depositors
whose money was lost during the country’s currency crisis, essentially
partially bailing out the banks with the country’s only viable public
asset. The officials spoke on condition of anonymity in line with
regulations.
Lebanon banned the sale of its gold in 1986 in the middle of the
country's civil war to protect state assets during a time of extreme
instability. The gold reserves have never been touched -- not after
15-year civil war in 1990, and not after multiple wars with Israel.
Some economists have proposed using a small percentage of the gold, in
tandem with wholesale reforms, to fix Lebanon’s ailing electricity
sector or to breathe life back into the country’s 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’s a largely unpopular move that is not expected to be
made anytime soon, especially months before general elections. When gold
was brought up in a session last week, Speaker Nabih Berri quickly
interjected to shut down the conversation. “Not feasible,” he said
sternly.
A draft fiscal gap law that offers a framework of returning some
depositors’ losses is languishing in parliament amid a debate over who
would absorb the losses: Lebanon’s battered banks, largely reluctant to
hold themselves accountable, or an indebted and wasteful state.
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A couple check out pieces of gold at a shop in Beirut, Lebanon,
Monday, Feb. 2, 2026. (AP Photo/Bilal Hussein)
 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.
Softening the financial blow
While authorities debate the future of the country’s gold, many
Lebanese depositors who lost most of their savings in the banks are
now turning to gold and silver to own something more tangible while
hoping it might even make up for some of their losses.
Crowds of people were lined up outside of Lebanon’s 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.
“For those making up for losses, gold is not a safe haven — it’s the
only haven,” 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.
Lebanon has had a troubled history in a volatile region, with
numerous conflicts and economic shocks, and little trust that the
structural issues will change.
“There 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,” said Sami Zoughaib, an economist at
Beirut-based think tank The Policy Initiative.
Zoughaib says it’s 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.
Outside one of Beirut’s 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 “an adornment and
treasure.”
“If a woman is in a tough situation ... she can sell her gold. And
when gold prices go up, then she’s the winner,” she said. But she
refuses to sell any of hers.
When looking at the reluctancy to sell gold among both the citizens
and the authorities, Zoughaib said, “I think this just tells us just
how important that gold is in the psychology of people."
"They are not even able to imagine a use case for it beyond being a
hedge,” he said.
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