Singapore challenges London: Asia, holding 70% of gold demand, launches its own clearing system
The global gold market map is undergoing fundamental changes. Singapore has officially launched a large-scale program to transform itself into the main hub for physical gold trading in Asia. And this is not just another initiative — it is backed by six of the world's largest banks, including DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB. They have united to create a new clearing system for physical gold that will be stored on the island. Thus, Singapore is entering direct competition with Hong Kong, which has its own precious metal clearing planned for July.
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: Asia accounts for 70% of global gold demand, yet key prices are still set in London and New York. This is a systemic problem that Singapore intends to solve.
How Singapore is Becoming a Gold Leader
The Singapore Exchange will open an over-the-counter (OTC) clearing system for physical gold stored in Singapore by the end of 2026. The launch of interbank trading is expected from 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 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 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 for such volumes. Gan Kim Yong called it a systemic problem that the main price benchmarks are set by London and New York. This is particularly sensitive for Asia: during local trading hours, liquidity drops, making large transactions more difficult. According to the World Gold Council, OTC deals are better suited for large institutional operations than exchange-traded ones: they give participants more flexibility in terms of 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 as early as 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 in price this year — this has attracted the attention of institutional investors and intensified the 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.
Analytical conclusion: We are witnessing not just competition between two cities, but an attempt to reshape the global gold market. Asia, which generates the lion's share of demand, is finally getting infrastructure adequate for its volumes. Victory in this race will determine where and how the price of gold will be set in the coming decades. Singapore, with the support of six global banks, looks extremely convincing.