Singapore challenges London: Asia takes control of the gold market
Singapore is launching a large-scale program to become the leading gold trading hub in Asia, and I see this as a tectonic shift in global financial infrastructure. Six of the world's largest banks — DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB — have already joined the creation of a new clearing system for physical gold stored on the island. This is a direct challenge not only to Hong Kong but also to London and New York.
On 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, and it has solid reasons for this: Asia accounts for 70% of global gold demand, yet key prices are still set in the West. This is a systemic imbalance that Singapore intends to correct.
How Singapore is becoming the new gold hub
The Singapore Exchange will launch an over-the-counter (OTC) clearing system for physical gold by the end of 2026. Interbank trading is expected to begin in 2027. This is not just a technological upgrade — it is the creation of a full-fledged infrastructure that the Asian market has been lacking.
Starting in October, the Monetary Authority of Singapore will provide gold storage services for foreign central banks. Foreign financial institutions and sovereign funds will be able to hold their reserves on the island. As part of tax incentives, the 5% limit on investments in physical precious metals will be lifted. Funds and family offices will now be able to more 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, but the continent still lacks developed infrastructure to handle such volumes. Gan Kim Yong identified as a systemic problem the fact that 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 my data, Singaporean authorities are not seeking to completely displace existing markets. Their goal is to turn the country into a connecting hub for the Asian region, linking local demand with global liquidity during daytime hours. OTC deals are better suited for large institutional operations than exchange trading: 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, which plans to launch its own gold clearing system in July and resume trading in gold futures. To this end, the city has secured support from several banks and established connections with central banks.
Gold has significantly increased in price this year — this has attracted the attention of institutional investors and intensified the rivalry between the two hubs. DBS, one of the participants in the Singapore system, is 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 claim to commercial success.
My expert opinion: Singapore is demonstrating a rare strategic discipline for financial centers. Creating a full-fledged infrastructure with central bank support and tax incentives is not just a hub, but a new ecosystem. If Hong Kong does not respond symmetrically, the balance of power in Asian gold trading could shift permanently.