Lebanon has $12 bln of gold, won't buy or sell -C.bank

Lebanon has $12 bln of gold, won’t buy or sell -C.bank

Gold prices hit a record $1,387.10 an ounce earlier this month.

October 27, 2010 8:39 by Reuters

Lebanon, which has gold reserves worth nearly $12 billion, has no intention of buying or selling the precious metal, the central bank governor said on Tuesday.

Riad Salameh told Reuters that the bank’s stocks made it the second biggest holder of gold in the Middle East and North Africa, and that maintaining those reserves was important to preserving confidence in the Lebanese pound.

“Lebanon will sit on its gold. We don’t have the intention of doing any trading on the gold,” he said in an interview.

“…The market perceives the stock of gold that the central bank has (is) a major backing for the currency and it will hurt confidence if we’re active in the market of gold, whether selling or buying.”

Gold prices hit a record $1,387.10 an ounce earlier this month, but have retreated slightly since then. On Tuesday gold was trading around $1,340 an ounce.

“…In a world where you could see major crises, the payment instrument of last resort is gold — especially for a country like Lebanon that doesn’t have natural resources,” Salameh said.

(Reporting by Yara Bayoumy and Dominic Evans; Editing by Sue Thomas)