Singapore challenges London and Hong Kong: Asia takes control of the gold market
Singapore launches a large-scale program to transform into Asia's main hub for physical gold trading. The initiative has been supported by six of the world's largest banks, including DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB. They have joined in creating a new over-the-counter (OTC) clearing system for gold that will be stored on the island. This is a direct challenge not only to London, where key prices are still set, but also to Hong Kong, which plans to launch its own clearing system as early as July.
Deputy Prime Minister Gan Kim Yong presented a package of initiatives from the Singapore Exchange and the Monetary Authority of Singapore. The key message: Asia accounts for 70% of global gold demand, yet pricing is still dictated by London and New York. This is a systemic problem: liquidity drops during Asian trading hours, making it difficult to execute large institutional transactions.
Infrastructure Breakthrough
The Singapore Exchange will open an over-the-counter clearing system for physical gold stored in the country by the end of 2026. Interbank trading will begin in 2027. In parallel, the Monetary Authority will offer gold storage services for foreign central banks and sovereign funds starting in October. This will allow foreign regulators to hold reserves directly in Singapore.
Additionally, as part of tax incentives, the 5% limit on investments in physical precious metals for funds and family offices is being removed. They will now be able to freely increase the share of gold in their portfolios, which, in my view, will become a powerful driver of capital inflow into the region.
Hong Kong Does Not Give Up
Singapore has an active competitor. Hong Kong intends to launch its own gold clearing system and resume trading in gold futures as early as July. The city has secured support from several banks and established connections with central banks. The outcome of this race depends not only on the speed of launch but also on the depth of liquidity. However, the fact that six global giants have already backed the Singapore system is a serious bid for commercial success.
My analysis: The shift of the pricing center to Asia is not just a matter of ambition but of economic necessity. Singapore offers not only infrastructure but also tax incentives, making it extremely attractive for institutional players. Hong Kong wins on speed, but the depth of support from global banks for Singapore looks more convincing. Over the next 12 to 18 months, we will witness a fundamental shift in global gold trading.