Singapore plans to expand its gold storage capacity to become a custodian for bars held by foreign central banks, competing with Hong Kong as a regional hub for the precious metal. What’s the story?

Singapore aims to establish itself as a major center for hosting gold investments by central banks, reflecting the growing global demand for the precious metal as a safe haven. The Monetary Authority of Singapore announced that it is working to provide asset custody services for foreign central banks and sovereign entities, as well as developing gold-related products in capital markets to enhance liquidity and improve pricing mechanisms.

As part of these efforts, the country plans to create a clearing system supporting over-the-counter settlement for local gold trading, in collaboration with the Singapore Bullion Market Association, to improve market efficiency and attract more investors and institutions.

This move comes amid historic highs in gold prices recently, driven by investor interest in value-preserving assets amid economic volatility. Despite some declines related to geopolitical tensions, central banks around the world, including the People’s Bank of China, continue to increase their gold reserves as a hedge against U.S. dollar dominance.

Chie Hong Tat, Deputy Governor of the Monetary Authority and Minister for National Development, confirmed that Singapore is working closely with the financial sector to strengthen its position as an Asian gold trading hub, noting that this step adds a new pillar to the country’s wealth and asset management sectors.

As part of its plan, the government has formed a task force comprising global financial institutions such as JPMorgan Chase and UBS, along with local and regional banks like DBS Bank, United Overseas Bank, and ICBC Standard Bank, to develop a robust infrastructure for the gold market.

Attracting central banks, which hold about 39,000 tons of gold (roughly 18% of the total mined gold), is a key element of this strategy, alongside major financial institutions acting as market makers. This positions Singapore in direct competition with London and New York, in addition to Hong Kong, which currently dominates gold trading in Asia.

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