Singapore to launch gold clearing system and central bank vaulting services by end-2026

Singapore announced a series of measures on Monday, 15 June 2026, aimed at deepening its role as a regional hub for gold trading, clearing and storage, as Asia's share of global gold demand continues to rise.

Speaking at the 9th Asia-Pacific Precious Metals Conference, Deputy Prime Minister and Minister for Trade and Industry Mr Gan Kim Yong, who is also Chairman of the Monetary Authority of Singapore (MAS), outlined four areas of progress under the Gold Market Development Working Group, co-chaired by MAS and the Singapore Bullion Market Association (SBMA).

Mr Gan said the global economic landscape had become more contested and fragmented, with capital and goods continuing to move across borders amid greater geopolitical uncertainty. He said trust had become "a form of infrastructure" for investors seeking safe and transparent places to hold assets.

Asia accounts for roughly 70% of annual consumer gold demand, with China and India the top contributors to bar and coin demand in 2025, Mr Gan said. Southeast Asian markets, including Thailand and Vietnam, were also active.

However, he noted that trading, liquidity and price discovery remained concentrated in established centres such as London and New York, creating a gap for participants seeking to transact during Asian hours.

New OTC gold clearing system

The Singapore Exchange (SGX) will establish an over-the-counter (OTC) gold clearing system for Loco Singapore by the end of 2026, with interbank trading expected to build up from 2027, Mr Gan announced.

The system will support both large bars and kilobars, enabling standardised settlement during Asian trading hours, he said.

Six bullion banks, namely DBS, Deutsche Bank, ICBC Standard Bank, J.P. Morgan, OCBC and UOB, were set to sign a memorandum of understanding with SGX later the same day to participate as clearing members and support price discovery in the Loco Singapore market.

Central bank vaulting services

MAS will introduce central bank gold vaulting services by October 2026, Mr Gan said, complementing existing commercial vaulting capacity in Singapore, which already exceeds 2,000 tonnes.

The new services will allow foreign central banks and sovereign entities to vault their gold reserves in Singapore, backed by MAS' institutional standing, he said.

MAS will also extend gold accounts to a select group of Singapore-based bullion banks, enabling these institutions to provide gold-related services and liquidity to foreign central banks and sovereign entities, according to Mr Gan.

Capital market products and tokenisation

Mr Gan said SGX was exploring a physical deliverable gold futures contract to enhance price discovery and risk management in the Loco Singapore market.

He added that banks were keen to develop tokenised gold within the Singapore market, including through collaboration on the Gold Bar Integrity initiative led by the World Gold Council (WGC) and the London Bullion Market Association (LBMA).

Removal of investment cap for funds

In a fourth move, MAS will remove the existing 5% cap on physical investment precious metals under tax incentive schemes for funds, Mr Gan said.

He said this would allow eligible funds and family offices greater flexibility to diversify their portfolios and deploy more capital into physical gold held in Singapore. Further details are expected to be provided by MAS in September 2026.

Growing demand for Singapore-based gold products

Mr Gan pointed to existing demand for Singapore-based gold solutions, citing the LionGlobal Singapore Physical Gold Fund, which invests in gold held in custody in Singapore.

The fund has attracted more than S$600 million in assets since its launch in November 2025, he said.

He added that Singapore was working to align its market practices with global standards, including the LBMA Good Delivery framework for large bars and standards adopted by exchanges such as the Chicago Mercantile Exchange and the Shanghai Gold Exchange for kilobars.

Mr Gan said Singapore was not seeking to replace established gold trading centres, but to serve as "a trusted node" connecting regional demand with global liquidity during Asian trading hours.

The conference was also attended by KL Yap, Chairman of the SBMA; Albert Cheng, Chief Executive Officer of the SBMA; David Tait, Global Chief Executive Officer of the WGC; and Ruth Crowell, Chief Executive Officer of the LBMA.

Hong Kong's competing ambitions

Singapore's push comes as Hong Kong also seeks to expand its position in the global gold market. Hong Kong Exchanges and Clearing (HKEX) is exploring a relaunch of gold futures, as the territory aims to become an international gold trading and storage hub, Reuters reported in early May.

HKEX's head of markets, Gregory Yu, told local lawmakers the exchange intended to revive gold futures, though no timeline was given, according to a video of the meeting reviewed by Reuters.

HKEX had previously launched gold futures in 2017, after an earlier contract introduced in 2008 was suspended in 2015, with both attempts hampered by weak liquidity and competition from established markets, Reuters noted.

Yu said the exchange planned to continue consulting market participants, refine contract design and improve delivery mechanisms, citing investor demand for risk diversification amid ongoing geopolitical tensions.

The Hong Kong government has separately been working to expand bullion storage capacity as part of its broader effort to position the city as an international gold trading centre, according to the report.