Singapore challenges London: 70% of global gold demand already in Asia, and the city-state is building a new hub
Singapore is launching an ambitious program to transform itself into the main gold trading hub in Asia. Six of the world's largest banks have already joined the creation of a new clearing system for physical gold, which will be stored on the island. Thus, Singapore is entering direct competition not only with London but also with Hong Kong, which is also preparing its own precious metal clearing system by 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 expects to take a leading position in the region, as Asia accounts for 70% of global gold demand. The paradox is that key prices are still set in London and New York, forcing Asian traders to adapt to Western trading hours.
This is a systemic problem that Singapore intends to solve radically.
How Singapore is Taking the Lead in Gold
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 provide gold storage services for foreign central banks, allowing foreign financial institutions and sovereign funds to hold their reserves on the island. 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 freely increase the share of gold in their portfolios.
What the Asian Gold Market Lacks
About 70% of annual global gold demand comes from Asian buyers, yet the continent still lacks developed infrastructure to handle such volumes. Gan Kim Yong called this a systemic problem: the main price benchmarks are set by London and New York. This is particularly sensitive for Asia—liquidity drops during local trading hours, 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, matching local demand with global liquidity during daytime hours. OTC deals are better suited for large institutional operations than exchange-traded ones: they give participants more flexibility in terms of time 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 rivalry 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 the larger clearing volume—Hong Kong or Singapore—depends not only on the speed of launch. But already, six major international banks are ready to support the Singapore system, which is a serious bid for commercial success.
Expert opinion: Singapore is betting not just on infrastructure but on integration with blockchain solutions (DBS's gold tokenization) and attracting institutional giants. If the system launches on time, we will see a flow of liquidity from Western platforms to Asia. Hong Kong will have to speed up, or it risks becoming second in this race.