China eyes Hong Kong as gold trading hub in bid for market dominance

Wed Mar 04 2026

China is leveraging Hong Kong in its efforts to expand its influence over the gold market, building up trading infrastructure to draw foreign investors while mining companies tap the territory’s stock market to fund overseas expansion.

The Hong Kong government recently established Hong Kong Precious Metals Central Clearing, a fully state-owned company that will start operating on a trial basis this year. The government also aims to expand the territory’s gold storage facilities to more than 2,000 metric tons within three years. It plans to work more closely with the Shanghai Gold Exchange as well.

China is the world’s largest producer and consumer of gold, yet international prices are determined largely in the London bullion market and the New York futures market, which have the necessary infrastructure. Chinese authorities hope to change this.

“We will expand the country’s market share and influence on prices in the international gold market,” said Joseph Chan Ho-lim, Hong Kong’s undersecretary for financial services and the treasury, at the Hong Kong Gold Exchange in a Lunar New Year address on February 20.

The planned infrastructure will pave the way for mainland investors to trade and store gold in Hong Kong. This activity could, in turn, draw overseas investors. If Hong Kong becomes established as a bullion market, Asian countries will save on transport and logistics costs compared with handling delivery in London.

Alongside these efforts, gold mining companies in mainland China are expanding overseas. Zijin Gold International, a unit of Zijin Mining Group, one of the largest state-owned players, announced plans in January to acquire Canada’s Allied Gold for about CAD 5.5 billion (USD 4 billion), giving it stakes in projects in Ethiopia and Mali.

The Hong Kong stock market has been funding this overseas expansion. Zijin Gold raised about HKD 28 billion (USD 3.6 billion) through an IPO last September. Chifeng Jilong Gold Mining, China’s largest private gold mining company, has listed in Hong Kong to fund mines in Laos and Ghana.

Gold mining stocks have outperformed the broader Hong Kong market. Zijin Mining shot up roughly 150% in 2025, then jumped about 26% from the end of 2025 to February 23, beating the benchmark Hang Seng Index, which rose about 28% in 2025 and 6% from year’s end to February 23. Chifeng Gold climbed 34% from the end of 2025 to February 23.

The Chinese government’s vision of making Hong Kong a gold trading hub is boosting these companies’ shares. Higher stock prices can, in turn, enable them to raise more growth capital from the market to boost their expansion abroad.

Geopolitics are likely a factor in the apparent coordination between the public and private sectors to acquire gold-mining rights while also bringing gold trading to China.

“Emerging countries saw how Western countries froze Russia’s assets after its invasion of Ukraine and have been moving to keep their gold within their own borders,” said Koichiro Kamei, head of Japan’s Market Strategy Institute.

The People’s Bank of China increased its gold holdings for 15 straight months through January. It has been lowering the share of US treasuries in its foreign currency reserves, in an apparent effort to reduce its reliance on the US dollar.

BofA Securities sees much more room for the Chinese central bank to buy more gold. This could provide support to prices now at record highs of around USD 5,000 per troy ounce.

Source: https://kr-asia.com/