Singapore challenges London and Hong Kong: A new era of gold clearing in Asia
Asia, which accounts for 70% of global gold demand, is finally getting infrastructure worthy of its status. Singapore is launching a large-scale program to create its own clearing center for physical gold, directly challenging the pricing dominance of London and New York. Six of the world's largest banks have already supported this initiative.
On June 15, Deputy Prime Minister Gan Kim Yong presented an ambitious package of initiatives developed by the Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS). The key element is an over-the-counter (OTC) clearing system for gold stored on the island. Its launch is scheduled for the end of 2026, with interbank trading starting in 2027. Participants include DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB — indicating a high level of trust in the project.
Why Asia Needs Its Own Pricing Center
The paradox of the global gold market is that 70% of demand is generated in Asia, but key price benchmarks are still set in the London and New York markets. This creates a systemic problem: during Asian trading hours, liquidity drops significantly, making large transactions difficult. Singapore aims to correct this imbalance by becoming a bridge between regional demand and global liquidity.
Starting in October of this year, MAS will begin offering gold storage services for foreign central banks and sovereign wealth funds. Additionally, as part of tax incentives, the 5% limit on investments in physical precious metals for funds and family offices will be removed. This means institutional investors can now significantly increase the share of gold in their portfolios.
Hong Kong Fights Back: The Battle for Asian Gold
Singapore is entering direct competition with Hong Kong, which plans to launch its own clearing system as early as July of this year. Hong Kong also intends to resume gold futures trading, securing support from several banks and establishing connections with central banks.
Time will tell who wins this race. However, it is already clear that the support of six global banks gives Singapore a serious commercial advantage. DBS, one of the system's participants, is preparing to issue tokenized physical gold for retail clients, while OCBC is already actively buying, selling, and storing the metal for institutions.
My view: Singapore is betting not on speed of launch, but on the depth of integration with the global banking system and the creation of a full-fledged ecosystem — from storage to clearing and tokenization. This is a more strategic approach than a simple attempt to launch exchange trading. Hong Kong may win on speed, but Singapore is aiming for long-term dominance in the region, and its chances of success look very convincing.