Singapore Sets Up Gold Trading Hub to Compete with Hong Kong

· City-state is Pushing to become Precious Metals Hub

Key Announcements

1. Gold Over-the-Counter (OTC) Clearing System

o To be launched by the end of 2026.

o Will provide a centralized clearing mechanism for gold stored in Singapore.

o Banks will act as intermediaries between buyers and sellers, reducing counterparty risk.

2. Six Clearing Member Banks

o DBS Group

o Oversea-Chinese Banking Corporation

o United Overseas Bank

o Deutsche Bank

o ICBC Standard Bank

o J.P. Morgan

3. Relaxation of Investment Rules

o The Monetary Authority of Singapore (MAS) will remove the existing 5% cap on precious metals holdings for funds seeking tax incentives.

o This is expected to encourage greater investment in physical gold by funds and family offices.

4. MAS Gold Vaulting Services

o MAS will launch its own gold vaulting services by October.

o Singapore already has commercial vault capacity exceeding 2,000 metric tons of precious metals.

5. Gold Accounts for Sovereign Investors

o Foreign central banks and sovereign entities will be able to hold and manage gold through accounts offered by appointed banks.

Competition with Hong Kong

Singapore's move comes as Hong Kong is also expanding its gold market infrastructure.

· Hong Kong signed an agreement with the Shanghai Gold Exchange in January to establish a gold clearing system.

· Hong Kong aims to develop vault capacity exceeding 2,000 tons within three years.

This reflects increasing competition between Singapore and Hong Kong to become Asia's leading precious metals trading and storage center.

Gold Market Developments

· Gold prices rallied strongly in 2025, reaching above US$5,300 per troy ounce.

· Prices later declined to around US$4,100–4,200 per ounce due to:

o Inflation concerns

o Higher energy prices

o Expectations of tighter monetary policy

Following the announcement of a U.S.–Iran peace framework, gold rose more than 2%, supported by:

· Lower oil prices

· Reduced inflation fears

· A weaker U.S. dollar

Growing Retail and Institutional Participation

DBS

· Recently enabled customers to digitally buy, hold, and trade physical gold through its mobile application.

OCBC

· Offers access to a Singapore-listed gold ETF backed by domestically vaulted gold.

· Has expanded into physical gold trading, storage, and custody services for institutional and wealthy clients.

Significance

These initiatives are expected to:

· Increase liquidity in Singapore's gold market.

· Attract global investors, central banks, and family offices.

· Strengthen Singapore's role as a trusted financial and commodities trading hub.

· Enhance Asia's gold trading infrastructure and reduce dependence on Western market centers such as London and New York City.

[ABS News Service/15.06.2026]

SINGAPORE - Singapore has announced a fresh wave of initiatives to spur gold trading, doubling down on its ambitions to become a leading hub for precious metal transactions in the region and beyond.

The government on Monday announced it will create an over-the-counter clearing system for gold stored in Singapore by year-end, with interbank trading expected to ramp up next year. Under the system, financial institutions will sit between buyers and sellers as transaction managers, reducing the risks facing traders such as a counterparty potentially failing to uphold an a deal.

Six banks -- local lenders DBS Group Holdings, Oversea-Chinese Banking Corp. and United Overseas Bank, along with foreign players Deutsche Bank, ICBC Standard Bank and J.P. Morgan -- have been identified as clearing members.

"Our gold market initiatives are part of a broader effort to strengthen Singapore's role as a trusted global node for capital, investment and physical trade flows," the country's deputy prime minister, Gan Kim Yong, said on Monday as he announced the plans. "Asia's demand for financial services is growing, and so is the need for reliable market infrastructure in this time zone."

Gan also said the city-state's central bank and financial regulator -- the Monetary Authority of Singapore -- will remove an existing 5% limit on the proportion of precious metals held by a fund for it to qualify for government tax incentives.

He said this will allow funds and family offices "to diversify their portfolios more flexibly, and support greater capital deployment into physical gold in Singapore."

In addition, the MAS will establish its own gold vaulting services by October, complementing the city-state's commercial vaulting capacity of over 2,000 metric tons of precious metal, Gan said.

The MAS will also offer gold accounts through appointed banks that foreign central banks and sovereign entities can use to manage their precious metal holdings.

Singapore's push to boost precious metals trading and storage comes as rival hub Hong Kong announced similar moves to establish the China-ruled city as a key player in the sector.

China is leveraging Hong Kong in efforts to expand 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.

In January, the Hong Kong government signed a deal with the Shanghai Gold Exchange to establish a central clearing system for gold. Hong Kong is aiming to develop vault capacity of more than 2,000 tons within three years.

Gold prices have been volatile in recent months. Following a massive rally last year, the precious metal slumped in the face of inflation fears and surging energy prices after the Iran war began in late February, with expectations mounting that central banks like the U.S. Federal Reserve will tighten monetary policy to quell sustained increases in costs for businesses and consumers.

With alternative assets set to reward investors with enticing yields on potentially higher interest rates, analysts said gold fell out of favor. Gold futures hit more than $5,300 per troy ounce early this year, but they were trading around $4,100 to $4,200 last week.

The precious metal, however, rose more than 2% on Monday following Sunday's announcement that U.S. and Iranian officials have agreed on a peace framework.

"The peace framework has helped gold because lower oil reduces the inflation shock and Fed hike risk, while a softer dollar supports precious metals," Charu Chanana, chief investment strategist at brokerage Saxo, told Nikkei Asia. "This looks more like a relief bounce than a clean bullish reversal."

Still, Singapore authorities and commercial banks say they believe in the long-term potential of the gold market. Singapore's largest bank, DBS, last week said it was letting customers digitally access, hold and trade gold through its mobile application.

"Gold as an asset class has taken off in recent years, demonstrating its enduring value as a safe haven," James Tan, group head for investment product and advisory at DBS, said when the offering was announced. "While our retail investors have been able to buy gold funds, access to physical gold has been largely available to only institutional and accredited investors."

OCBC was among platforms that offered investors access to an exchange-traded fund that debuted on the Singapore stock market in March tracking gold vaulted domestically. Last week, the lender announced it was entering the physical gold business by letting institutional and wealthy clients buy, sell and store the precious metal with OCBC in a local vault.

"Our Singapore-based physical gold trading and custodian capabilities represent a strategic expansion of our market-making capabilities in precious metals," said Kenneth Lai, head of global markets at OCBC. "We are looking to expand to institutional as well as other client segments, and offer them a comprehensive range of physical gold investment."