Hong Kong is preparing to launch its long-awaited gold clearing and settlement system next week, a move anticipated to significantly impact the global gold market. The first gold settlement through the new system is planned for Tuesday, following deal data input on Monday, according to two sources familiar with the matter. This initiative aims to transform Hong Kong from a gold-price taker to a price maker, contingent on securing broader participation from global and local banks.
Preparations for the system's launch have been underway, with "large bars" of gold reportedly moving from London, the US, and Europe into Asia in anticipation. This shift could introduce short-term volatility in the London gold market as the global market rebalances. One bank executive, whose institution will participate in the clearing system, confirmed that preparations are in place to begin executing deals with gold traders next week.
The development follows earlier statements from the Financial Services and the Treasury Bureau (FSTB) indicating that trial operations for the clearing system were slated to begin this year to ensure its attractiveness and operational stability. This system is seen as a crucial step for Hong Kong in establishing itself as a preeminent hub for bullion trading in Asia, potentially outcompeting rivals like Singapore, which has similar ambitions but lacks a defined timeline.
