Singapore's Breakthrough: How Asia is Seizing the Gold Market Initiative from London and New York
Singapore is launching an ambitious program to transform itself into Asia's leading physical gold trading hub. And this is not just an announcement — the project is backed by six of the world's largest banks, including DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB. They have joined forces to create a new clearing system for gold that will be stored on the island. Thus, Singapore is entering direct competition not only with London but also with Hong Kong, which has already announced the launch of its own clearing system in July.
Last week, on June 15, Deputy Prime Minister Gan Kim Yong presented a package of initiatives developed by the Singapore Exchange and the Monetary Authority of Singapore. The key idea is simple: 70% of global gold demand is generated in Asia, but pricing is still dictated by London and New York. This is a systemic imbalance that Singapore intends to correct.
Next-Level Infrastructure
The exchange plans to launch an over-the-counter (OTC) clearing system for physical gold 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 wealth funds starting in October. This will allow global institutions to hold reserves directly in Singapore.
An important tax relief: the 5% limit on investments in physical precious metals for funds and family offices is being lifted. This is a direct signal to the market — increase the share of gold in portfolios without administrative barriers.
Why Asia Needs Its Own Hub
Asian buyers account for about 70% of annual global gold demand, but the continent has lacked developed infrastructure for such volumes. Gan Kim Yong rightly called this a systemic problem. During local trading hours, liquidity drops, making large transactions more difficult. Singapore does not aim to completely displace London but wants to become a bridge connecting Asian demand with global liquidity during daytime hours.
According to the World Gold Council, OTC transactions are better suited for large institutional operations as they offer more flexibility in timing and terms. It is this segment that Singapore is betting on.
The Race with Hong Kong
Competition will be fierce. Hong Kong plans to launch its own gold clearing system as early as July and resume trading in metal futures. However, Singapore has an advantage: the support of six major international banks is a serious bid for commercial success. DBS is already preparing tokenized physical gold for retail clients, while OCBC actively buys, sells, and stores precious metals for institutions.
My view as an analyst: The rise in gold prices this year has only intensified the battle for the status of Asia's leading hub. And although Hong Kong is launching its system faster, the scale of support from global banks favors Singapore. The outcome of this race will determine where the Asian premium on gold prices is formed — and that represents billions of dollars in turnover.