Singapore is reshaping the gold market map: Asia demands its own hub
Singapore is launching an ambitious program to transform into Asia's leading hub for gold trading. Six of the world's largest banks have already supported the initiative to create a new clearing system for physical precious metals to be stored on the island. This is a direct challenge not only to London and New York, but also to Hong Kong, which plans to launch its own clearing system as early as July.
On Monday, June 15, Deputy Prime Minister Gan Kim Yong officially unveiled a package of initiatives from the Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS). The city-state aims to take a leading position in the region: Asia accounts for about 70% of global gold demand, yet key price-setting mechanisms remain in the West. This is a systemic imbalance that Singapore intends to correct.
New Infrastructure for Asian Gold
The key element of the strategy is the launch of an over-the-counter (OTC) clearing system for physical gold stored in Singapore. The launch is scheduled for the end of 2026. Participants include DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB. Interbank trading on the new platform will begin in 2027.
In parallel, starting in October this year, MAS will provide gold storage services for foreign central banks. This will allow sovereign funds and foreign financial institutions to hold their reserves directly in Singapore. As part of tax incentives, the 5% limit on investments in physical precious metals for funds and family offices is also being lifted. They will now be able to increase the share of gold in their portfolios much more freely.
Why Asia Needs Its Own Gold Center
The current situation is paradoxical: 70% of annual global gold demand is generated by Asian buyers, but the continent still lacks developed infrastructure for such volumes. As Gan Kim Yong rightly noted, this is a systemic problem. The main price benchmarks are set by London and New York, which is particularly critical for Asia: liquidity drops during local trading hours, making large transactions difficult.
It is important to emphasize: Singapore does not seek to completely displace existing markets. The goal is to become a link that connects Asian demand with global liquidity during daytime hours. OTC deals are ideal for large institutional operations, providing participants with more flexibility in terms of time and trading conditions.
Race for Leadership: Singapore vs. Hong Kong
Singapore has an active competitor. Hong Kong intends to launch its own gold clearing system as early as July, having secured support from several banks and established ties with central banks. The rise in gold prices this year has only fueled institutional interest and intensified the rivalry between the two hubs.
Notably, one of the participants in the Singapore system, DBS, is already preparing to issue tokenized physical gold for retail clients. Its competitor OCBC is already buying, selling, and storing precious metals for institutional investors in Singapore.
Cryptalist Analysis: The outcome of this race will be determined not by the speed of launch, but by the depth of integration with the real sector. The support of six global banks is a serious bid for commercial success. However, Hong Kong should not be discounted, as it is traditionally strong in working with Chinese capital. In my view, we are witnessing not a fight to the death, but the formation of a bipolar Asian gold trading system, which will benefit the entire market in the long term.