Yes. Bullion banks routinely lend out gold through the gold leasing market, where they loan physical gold to jewelers, miners, refiners, and other market participants in exchange for a lease rate (interest). This works similarly to how banks lend cash, except the underlying asset is gold rather than currency.
Leased gold often doesn’t stay idle in a vault. It can be used for hedging, financing mining operations, or supporting jewelry manufacturing. Central banks also lease portions of their gold reserves to bullion banks, who then lend it onward for a profit margin.
This practice means the same physical gold can be tied to multiple claims at once, since much of it exists as unallocated (paper) holdings rather than segregated bars, raising questions about how much “available” gold is actually backed by physical metal.