Kawthar Zantour

According to a study by CME Group, a US firm that manages stock exchanges, global demand for gold reached an all-time high in 2023, up 3% in 2022.

Security in turbulence

Gold is still considered “the world’s preferred safe haven” because it holds its value without dependence on any issuer or government for trade. By contrast, currencies and bond prices can fluctuate, sometimes wildly.

Market analyst Ross Norman, speaking to Reuters, said: “What makes the gold rally so unusual is that it is occurring despite significant traditional headwinds with the US dollar rising, Treasury yields rising, and the likelihood of higher-for-longer US rates increasing.”According to the IMF, the increased demand can be explained by one of two things.

First, during periods of high economic and political uncertainty, coupled with low yields on currencies—a combination characteristic of recent years—gold has been a safe and desirable reserve asset.

Second, gold is seen as a secure asset where countries face financial sanctions, asset freezing, and the confiscation of financial investments.

The IMF report cited the example of the Group of Seven (G7) countries’ decision to freeze the foreign exchange reserves of the Russian central bank, which prompted Russia to accelerate its gold purchases.

Russia announced in 2021 that its gold assets were fully stored in Russia, likely prompted by concerns over potential asset seizures or freezes amid international financial restrictions, as indeed transpired.

Gaddafi’s piggy bank

During Gaddafi’s rule, Libya prioritised accumulating foreign exchange and gold reserves. Still, its gold and foreign exchange reserves declined after 2014 due to port and oil field closures as militias fought. A report from the World Gold Council suggested that Libya’s gold reserves dropped from 143 tonnes in 2011 to 116 tonnes in 2014, but the CBL refuted this claim, saying its “gold balance has remained unchanged since 2011”.

After Dbeibeh announced new gold purchases, some suggested that this was a cover for another historical gold reserve theft, similar to the looting of 2011. In September 2011, Libya’s then-Central Bank Governor Qassem Azzuz accused Gaddafi of selling a fifth of the country’s gold reserves in the days before his downfall.

Azzuz revealed that 29 tonnes of gold valued at 1.7bn LYD ($1bn) were sold to local traders to finance Gaddafi’s ill-fated war against opponents. “Gold was converted into cash to pay salaries and provide liquidity, especially in Tripoli,” he said.

The remarks by Azzuz came a month after his predecessor, Farhat Bengdara (who defected from the regime in March 2011), confirmed suspicions that Gaddafi was trying to sell Libyan gold to fund his own protection and buy off the tribes. Bengdara said Gaddafi had even offered to sell 25 tonnes of gold to his friend but that Bengdara had advised his friend against the purchase.

The missing tonnes

Efforts to trace the looted gold have failed. Some claim it was buried in the Libyan desert, transported to South Africa, or stolen by foreign parties. Leaks from the former US Secretary of State Hillary Clinton’s emails in late 2020 alleged that former French President Nicolas Sarkozy (who supported Western intervention in Libya) had his eyes on the country’s gold and oil.

In another account, Libya’s gold and silver reserves (143 tonnes of gold and a similar quantity of silver) were transferred in March 2011. According to this story, it went from the central bank’s vaults in Tripoli to Sabha, a city in southwestern Libya, where major clashes occurred between pro- and anti-Gaddafi forces.

Gold and guns

Despite relative and precarious stability today, concerns persist over the potential for renewed conflict in Libya, a divided country with the world’s highest concentration of weapons in the hands of non-state actors. A UN report estimates that up to 200,000 tonnes of weapons are dispersed across Libya. And wherever there is gold and guns, there will be temptation.

Unsurprisingly, therefore, Libya’s central bank has been subject to repeated attacks and break-in attempts. In 2016, the US Embassy in Libya expressed “strong concern” at efforts to drill into central bank safes “to circumvent Central Bank of Libya (CBL) control over Libya’s financial resources”.

The US and others have sought to prevent Libya’s wealth from being misappropriated for fraud or corruption. CBL officials say the United States and international financial institutions safeguard it. Certainly, Libya’s gold reserves are still subject to fears about theft, fraud, and diversion.

This is closely tied to the levels and integrity of Libya’s governance systems and adherence to the rule of law. CBL officials say any harm to its gold stock is highly improbable. One wonders.


Kawthar Zantour – A Tunisian journalist specialised in economic and political affairs, based in Tunisia.


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