Asian Gold Renaissance: Singapore Challenges London and Hong Kong
Singapore is launching an ambitious program to become the main hub for physical gold trading in Asia. The idea has been supported by six of the world's largest banks, which have joined the creation of a new clearing system for the precious metal stored on the island. Thus, Singapore is entering direct competition not only with London but also with Hong Kong, which is preparing its own clearing launch as early as July.
On Monday, June 15, Deputy Prime Minister Gan Kim Yong presented a package of initiatives from the Singapore Exchange and the Monetary Authority of Singapore. The city-state aims to take a leading position in the region: Asia accounts for 70% of global gold demand, yet key prices are still set in London and New York. This is a systemic issue that Singapore intends to address.
New Clearing Infrastructure and Tax Incentives
The Singapore Exchange will launch an over-the-counter (OTC) clearing system for physical gold stored in Singapore by the end of 2026. Participants include DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB. Interbank trading is expected to begin in 2027. This is not just a technical innovation but a fundamental shift: now large institutional transactions can be conducted during Asian trading hours without relying on Western market liquidity.
Starting in October, the Monetary Authority of Singapore will offer gold storage services for foreign central banks, allowing foreign financial institutions and sovereign funds to hold reserves directly in Singapore. As part of tax incentives, the 5% limit on investments in physical precious metals is also being lifted, enabling funds and family offices to more freely increase their gold portfolio allocations.
Hong Kong Is Not Idle: The Battle for Asian Liquidity
Singapore has an active competitor. Hong Kong plans to launch its own gold clearing system in July and resume trading in metal futures. To this end, the city has secured support from several banks and established ties with central banks. However, as I see it, Singapore's system is already ready to support six major international banks, which is a serious bid for commercial success that could outweigh the factor of launch speed.
In parallel, DBS is preparing to issue tokenized physical gold for retail clients, while OCBC is already buying, selling, and storing the precious metal for institutional investors. This creates a closed ecosystem: from storage to clearing and retail tokenization.
My conclusion: Asia has long consumed 70% of the world's gold, but pricing remained in the hands of the West. Singapore offers not just an alternative but a full-fledged infrastructure that could change the global landscape of precious metal trading. If the project is implemented on time, we will witness a historic shift of liquidity from London to the East.