Singapore is reshaping the gold market map: Asia demands its own pricing center
Singapore is launching an ambitious program to become the main hub for physical gold trading in Asia. Six of the world's largest banks have already supported the creation of a new clearing system for the precious metal stored on the island. This is a direct challenge not only to Hong Kong but also to the established London pricing model.
On June 15, Deputy Prime Minister Gan Kim Yong presented a package of initiatives from the Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS). The logic is simple and uncompromising: Asia accounts for 70% of global gold demand, yet key price benchmarks are still set in London and New York. This is a systemic imbalance that Singapore intends to correct.
How Singapore Plans to Become a Leader
SGX 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. This is not just an infrastructure project but the creation of a full-fledged financial hub that will meet the needs of Asian institutions.
Starting in October, MAS will also provide gold storage services for foreign central banks and sovereign wealth funds. 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 significantly increase their gold portfolio allocations without administrative barriers.
The Asian Paradox: Demand Exists, Infrastructure Does Not
About 70% of global annual gold demand comes from Asian buyers, but the continent has lacked developed infrastructure to support such volumes. Gan Kim Yong rightly called it a systemic problem that major price benchmarks are set by London and New York. This is particularly sensitive for Asia: liquidity drops during local trading hours, making large transactions significantly more difficult.
Singapore's authorities are not seeking to completely displace existing markets. Their goal is to become a bridge that connects local demand with global liquidity during daytime hours. OTC deals are better suited for large institutional operations than exchange trading, as they give participants more flexibility in timing and terms.
The Race for Leadership in the Asian Gold Hub
Singapore has an active competitor. Hong Kong plans to launch its own gold clearing system and resume metal futures trading as early as July. The city has secured support from several banks and established ties with central banks. However, Singapore's system already has backing from six major international banks—a serious bid for commercial success.
Gold has risen significantly in price this year, attracting institutional investors and intensifying the rivalry between the two hubs. DBS, one of the participants in Singapore's system, is preparing to issue tokenized physical gold for retail clients. Its competitor OCBC already buys, sells, and stores the precious metal for institutions in Singapore.
My analysis: The outcome of this race will be determined not by the speed of launch but by the ability to attract real liquidity flows. Singapore is betting on institutional support and tax incentives. If the system works as intended, we will witness a fundamental shift: Asia will cease to be a passive consumer of prices and will begin to set them. For the global gold market, this is a tectonic change.