Singapore is redrawing the map of the gold market: Asia gains its own clearing with support from six global banks
Singapore is launching a large-scale program to become the main gold trading hub 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 physical gold stored on the island. This puts Singapore in direct competition with Hong Kong, which plans its own clearing system for the primary precious metal in 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 fundamental imbalance that Singapore intends to address.
How Singapore is Becoming a Gold Leader
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.
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 their reserves in Singapore. Additionally, as part of tax incentives, the 5% limit on investments in physical precious metals will be removed. Funds and family offices will now be able to more freely increase their gold allocation in portfolios.
What the Asian Gold Market Lacks
About 70% of annual global gold demand comes from Asian buyers, but the continent still lacks developed infrastructure to support such volumes. Gan Kim Yong identified as a systemic problem the fact that key price benchmarks are set in London and New York. This is particularly sensitive for Asia: during local trading hours, liquidity drops, making large transactions more difficult.
According to Gan Kim Yong, Singapore does not aim to completely displace existing markets. The authorities want to turn the country into a connecting hub for the Asian region, bridging local demand with global liquidity during daytime hours. OTC deals are better suited for large institutional operations than exchange-traded ones, giving participants more flexibility in timing and trading conditions.
The Race for Leadership in the Asian Gold Hub
Singapore has an active competitor. Hong Kong plans to launch its own gold clearing system in July and resume trading in gold futures. To achieve this, the city has secured support from several banks and established connections with central banks.
Gold has significantly appreciated this year, attracting institutional investors and intensifying competition between the two hubs. One participant in the Singapore system, DBS, is currently preparing to issue tokenized physical gold for retail clients. Its competitor OCBC already buys, sells, and stores precious metals for institutional investors in Singapore.
Which hub will capture a larger clearing volume, Hong Kong or Singapore, depends not only on the speed of launch. But already, the Singapore system has the backing of six major international banks, which is a serious bid for commercial success.
Cryptalist Analysis: Shifting the liquidity center to Asia is not just a trend but a necessity. The fact that 70% of gold demand is generated in the region, yet prices are still dictated by London and New York, creates a structural arbitrage. Singapore, with its regulatory flexibility and support from systemically important banks, has every chance to become the new benchmark market for physical gold in Asia.