Singapore to launch gold clearing with JPMorgan, other banks

Singapore plans to launch a gold-clearing system this year, with banks including JPMorgan Chase & Co. and Deutsche Bank AG set to participate in the city-state’s push to become a hub in the global bullion market.

The Singapore Exchange will establish the over-the-counter clearing mechanism by the end of 2026, with inter-bank trading expected to build up from next year, said Gan Kim Yong, the country’s deputy prime minister and chairman of the Monetary Authority of Singapore.

“We are not seeking to replace established centers of gold trading and liquidity,” he said at the Asia-Pacific Precious Metal Conference on Monday. “Instead, Singapore can serve as a trusted node in the global gold ecosystem – connecting regional demand with global liquidity and supporting market activity during Asian hours.”

Singapore’s latest move intensifies competition with Hong Kong to become a major regional hub for trading gold. In recent months, both cities have advanced plans to capitalize on strong demand for the precious metal, with many banks remaining bullish about the long-term prospects for an asset coveted by investors as an alternative store of wealth.

Hong Kong’s central clearing system is expected to be ready by July and the special administrative region has signed up five Chinese and six international banks.

The new clearing system in Singapore will serve as “a foundational layer for the clearing and settlement of gold flows during Asian trading hours,” said SGX Group chief executive officer Loh Boon Chye. “We are also exploring a physically deliverable gold futures contract to give the market an exchange-based tool for price discovery and risk management.”

In Singapore, DBS Group Holdings Ltd., Oversea-Chinese Banking Corp., United Overseas Bank Ltd. and ICBC Standard Bank Plc, as well as JPMorgan and Deutsche Bank, will take part as clearing members after signing a memorandum of understanding with the Singapore Exchange at the conference on Monday.

“As investor demand for global gold grows, we see Singapore playing a complementary role alongside other major hubs by supporting liquidity across time zones and meeting evolving client needs,” said Wai Mei Hong, JPMorgan’s Singapore senior country officer.

The clearing system will be aligned with the industry-standard London Good Delivery framework for large bars, as well as delivery and settlement standards for kilobars adopted by major exchanges in Chicago and Shanghai.

“The gold market works best when liquidity and infrastructure are connected across regions,” Deputy Prime Minister Gan said. “With an established clearing infrastructure and strong market ecosystem, Singapore can support a more seamless global market across time zones – from Asia, to Europe, to the Americas.”

MAS will also introduce central bank gold vaulting services by October this year, he said, and will allow foreign monetary authorities to actively manage bullion holdings with a select group of banks based in the city-state. Attracting sovereign reserves would significantly boost liquidity in the local market and strengthen Singapore’s standing as a global trading center.

The central bank is also set to expand tax exemptions for eligible funds and family offices investing into physical investment precious metals, Gan said, referring to a specific technical term on the purity and form of gold.

As the government pushes to strengthen Singapore’s gold sector, some local banks are also rolling out products to meet growing demand. DBS, the city-state’s biggest lender, will allow customers to hold tokenized gold in the second half of the year. Meanwhile, institutional and high-net-worth clients of OCBC can now trade and store gold with the bank.

(By Yihui Xie)

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