Singapore Unveils Plan to Become Asia Gold Trading Hub

Singapore is launching an initiative to expand its gold-storage capacity and position itself as a custodian for foreign central banks. The Monetary Authority of Singapore (MAS) stated on Friday it will provide vaulting services to meet potential demand from sovereign entities. This move is part of a broader effort to compete with Hong Kong as a regional hub for the precious metal.

The central bank also plans to develop gold-related capital market products to promote price discovery and build liquidity. Additionally, a new clearing system will be established to support over-the-counter settlement for trading gold locally. These measures aim to create a robust ecosystem for the asset class in the Asia-Pacific region.

MAS Deputy Chairman Chee Hong Tat confirmed the plan during a press briefing, noting that the initiative mirrors previous efforts to deepen the city-state's equity markets. The government has established a working group to drive these projects forward.

Why Is Singapore Pursuing This Strategy?

The push to become a gold hub follows a historic rally in the precious metal driven by investors seeking alternative stores of wealth. While prices have retreated since the conflict in the Middle East began, central banks including China's have steadily added gold to hedge against US dollar dominance.

Singapore's ambition targets the nearly 39,000 tons of bullion held globally by central banks, which represents about 18% of all gold ever mined. Attracting these sovereign entities is viewed as a key to success, given their large volumes of reserves.

Officials stated that the goal is to anchor high-value activities and create good jobs for Singaporeans. The initiative aims to enhance the resilience and diversity of the financial sector while benefiting market participants in the region.

Chee Hong Tat emphasized that the city-state is not betting on short-term price movements but is instead creating an environment where gold trading can flourish. He likened the strategy to planting trees to ensure the ecosystem grows and bears fruit over time.

How Will the Infrastructure Be Developed?

The MAS and the Singapore Bullion Market Association (SBMA) have identified four key focus areas to strengthen the gold trading center. These areas include establishing robust, internationally aligned standards for vaulting and logistics.

Another focus is setting up a clearing system to support secure and efficient over-the-counter settlement for large bar and kilobar gold trades. Large bars are typically 12.4kg, the standard in London, while 1kg kilobars are preferred in Asian markets.

A Gold Market Development Working Group was established in January 2026 to oversee this development. The group includes members from major financial institutions such as JPMorgan Chase, UBS, DBS, and ICBC Standard Bank.

The working group also comprises the Singapore Exchange Group and the World Gold Council. Broader technical workstreams involve vault operators, refiners, and trading houses to ensure comprehensive support.

What Is the Competitive Landscape?

Singapore faces competition from Hong Kong, which recently signed a deal with the Shanghai Gold Exchange to expand its gold market links. Chee Hong Tat noted that Singapore is accustomed to competition and believes there is enough space for both cities to coexist.

He stated that while there may be competition in some areas, there could also be collaboration between the two financial centers. The client segments and market needs are not completely identical, allowing for distinct growth paths.

Demand for gold has remained firm despite a recent sharp fall in prices triggered by a stronger dollar and concerns over interest rates. The uncertainty in the global environment continues to drive investor interest in physical assets.

Singapore recently listed its first home-grown physical gold ETF on the Singapore Exchange. The LionGlobal Singapore Physical Gold ETF allows trading in both Singapore and US dollars.

The city-state aims to complement other major gold centers like London, where billions of dollars of the metal are traded daily. Establishing a trusted regional hub is intended to capture more flows of bullion and storage activities.