Singapore is aggressively pursuing its goal of becoming a major global hub for gold, with significant infrastructure and policy changes planned for 2026. The Singapore Exchange (SGX) is set to establish an over-the-counter (OTC) clearing mechanism for gold by the end of 2026, with inter-bank trading expected to ramp up from 2027. This initiative aims to address the "practical gap" in the Asian time zone where trading, liquidity, and price discovery are largely concentrated in Western markets like London and New York. Deputy Prime Minister Gan Kim Yong highlighted that the clearing system will support both large bars and kilobars for standardized settlement during Asian trading hours, aligning with global standards like the LBMA Good Delivery framework.
To further solidify its position, Singapore will also introduce gold-vaulting services for foreign central banks and sovereign entities by October 2026, according to Gan Kim Yong. The Monetary Authority of Singapore (MAS) will extend gold accounts to a select group of Singapore-based bullion banks to provide gold-related services and liquidity to these entities. Banks such as DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB have signed a memorandum of understanding with SGX to participate as clearing members, indicating strong industry support for these initiatives.
The city-state is also exploring the development of gold-related capital market products, including a physically deliverable gold futures contract by SGX and the use of tokenized gold. DBS recently announced plans to launch tokenized gold for retail customers in the latter half of 2026, building on the OCBC-LionGlobal Physical Gold Fund Token launched in April for institutional investors. Additionally, MAS will remove the 5% cap on physical investment precious metals under tax incentive schemes for funds, allowing for greater portfolio diversification and increased deployment of capital into physical gold in Singapore.
These strategic moves come as Asia accounts for approximately 70% of annual consumer gold demand, yet its gold market infrastructure has not fully kept pace with this demand. Singapore aims to serve as a trusted node in the global gold ecosystem, connecting regional demand with global liquidity and supporting market activity during Asian hours, rather than replacing established centers. Competition from Hong Kong, which is also pushing to expand its gold market links with Shanghai, remains a factor, with the World Gold Council's CEO David Tait noting that the ability to attract banks and quickly establish a market framework will be pivotal.
