Singapore and Hong Kong open a new gold race

Tue Aug 18 2026

Singapore and Hong Kong are stepping up major policy initiatives to become world-class gold hubs, opening a new front in their competition to capture Asia’s growing gold trade. Since the beginning of 2026, both financial centres have introduced major measures to strengthen their gold-trading ecosystems. Market observers say the two markets compete in some areas, but Asia's large and growing gold demand means there is sufficient room for both centres to coexist.

Singapore's initiatives: In March, Singapore announced plans to develop gold-related capital-market products, establish internationally aligned standards for vaulting and logistics, and build a clearing system for secure and efficient OTC settlement of large bars and kilobars. Singapore is also considering vaulting services for foreign central banks and sovereign entities.

Hong Kong's initiatives: In July, Hong Kong began trials of a central gold clearing and settlement system designed to make depositing, withdrawing and trading physical gold easier. It also launched the first phase of Delivery Connect with the Shanghai Gold Exchange, while expanding storage and refining capacity, gold investment products and possible tax incentives.

Bloomberg reported that the People's Bank of China was gradually transferring gold previously stored in London to Hong Kong, which could further strengthen Hong Kong's position as a gold-trading centre.

Hong Kong's advantage: Hong Kong benefits from its close relationship with mainland China, one of the world's largest gold consumers and producers. Its position as the world's largest offshore RMB centre could also support future gold trading, settlement and investment denominated in RMB.

Singapore's advantage: Singapore lacks Hong Kong's mainland-China hinterland but can leverage its trusted and neutral position to serve gold investors and storage clients across Asia, the Middle East and other regions. Political stability, policy consistency, rule of law and strong vaulting and logistics infrastructure are major advantages. Investment-grade gold and silver bullion have also been exempt from Singapore's GST since 2012.

Singapore's challenge: Singapore needs to build sufficient transaction volumes and market-making activity to establish greater influence over gold pricing. Currently, London remains the main centre for OTC spot-gold trading, while New York is dominant in gold futures and options.

The World Gold Council says Singapore and Hong Kong may both succeed because Asia's gold market is large enough to support two major centres. London and Zurich provide a comparable example in Europe.

Singapore banks expand gold services: DBS has introduced tokenised physical-gold investment and trading backed by gold held in a dedicated vault. OCBC entered physical-gold trading and custody in June for institutional and high-net-worth clients, while UOB has operated a physical-gold business for decades.

UOB reported that its physical-gold trading volume increased about 59% year-on-year, while transactions in gold savings accounts rose 48% year-on-year. OCBC also reported encouraging interest following the launch of its physical-gold services. DBS expects gold demand to continue growing steadily over the next five years.

News takeaway: Singapore and Hong Kong are building competing gold ecosystems. Hong Kong is leveraging mainland China's gold demand and RMB network, while Singapore is relying on its neutrality, financial infrastructure, vaulting capabilities and international investor base. Both are positioning themselves to capture a larger share of Asia's expanding gold market.

Source: https://www.thinkchina.sg/