Singapore aims for gold leadership: Asia accounts for 70% of global demand, but London dictates prices
Singapore officially enters the race for the status of the world's leading gold trading hub. On Monday, June 15, the country's Deputy Prime Minister, Gan Kim Yong, announced a comprehensive package of initiatives. Six of the world's largest banks — DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB — have already confirmed their participation in creating a new clearing system for physical gold, which will be stored on the island.
This is a direct challenge not only to London and New York, which still set key price benchmarks, but also to Hong Kong, which plans to launch its own gold clearing as early as July. The paradox is that Asia accounts for about 70% of global demand for the precious metal, yet the continent lacks developed infrastructure to handle such volumes. Gan Kim Yong called this a "systemic problem": during Asian trading hours, liquidity drops sharply, making large institutional deals difficult.
Infrastructure Breakthrough: Clearing and Storage
The Singapore Exchange (SGX) will open an over-the-counter (OTC) clearing system for physical gold stored in Singapore by the end of 2026. Full-fledged interbank trading will begin in 2027. In parallel, the Monetary Authority of Singapore (MAS) will start offering gold storage services for foreign central banks, sovereign wealth funds, and international financial organizations from October. Additionally, as part of tax incentives, the 5% limit on investments in physical precious metals for funds and family offices will be lifted, paving the way for a significant increase in gold's share in portfolios.
Hong Kong is Not Idle, but Singapore is Strong with a Consortium
Competition is intensifying. Hong Kong aims to launch its own clearing system and resume trading in metal futures as early as July, backed by several banks and connections with central banks. However, in my view, Singapore has a significant advantage — a consortium of six global financial giants that are already ready to support the system. This is not just a bid for leadership but a commercially sound bet on the future of the Asian gold market.
Notably, one of the participants in the Singapore system, DBS, is preparing to issue tokenized physical gold for retail clients, while its competitor OCBC is already actively buying, selling, and storing metal for institutions in Singapore. This indicates the formation of a full-fledged ecosystem — from storage to digital instruments.
Analyst's View: The shift in gold demand to Asia is not a temporary trend but a structural change. Singapore, offering institutional infrastructure, tax incentives, and support from the largest banks, has every chance not only to catch up with Hong Kong but to surpass it, becoming the main link between Asian demand and global liquidity. The key question is whether the new system can provide pricing comparable in significance to the London fix.