GFN – SINGAPORE: Singapore is accelerating plans to establish itself as a regional bullion hub, engaging global bullion banks and domestic lenders to deepen liquidity in physical gold trading and storage as Asian investor demand continues to expand.

According to a report by Bloomberg, the Monetary Authority of Singapore (MAS) has been meeting with major bullion market participants including JPMorgan Chase & Co. and UBS Group AG in recent months to evaluate the feasibility of positioning Singapore as a physical gold trading and storage center serving regional wealth flows.

 

Participants in the discussions also include ICBC Standard Bank Plc, a London bullion market clearing bank, alongside Singapore’s major domestic lenders DBS Group Holdings Ltd., United Overseas Bank Ltd., and Oversea-Chinese Banking Corp.

The effort reflects Singapore’s attempt to capture a larger share of Asia’s rapidly expanding bullion demand, particularly from wealthy investors and institutional participants seeking exposure to physical gold.

“There is strong and growing demand across Asia where investors are increasingly viewing gold as a safe-haven asset amid geopolitical uncertainty.”

“This is reinforced by robust Southeast Asian growth and rising investment flows into gold bars, coins, and other gold-backed products.”

Kelvin Ng, head of global markets at UOB, said the regional macro environment continues to support structural demand for physical bullion investment.

Singapore’s strategy is expected to focus primarily on institutional participants including central banks, asset managers, and family offices. Officials involved in the discussions indicated that government agencies beyond MAS may support the initiative as the city seeks to strengthen its position in global commodity finance.

The push also places Singapore in direct competition with Hong Kong, which has historically served as Asia’s primary gateway for bullion liquidity and wealth flows and is supported by Beijing’s broader ambitions to expand China’s role in global financial markets.

Singapore has previously attempted to build a gold derivatives ecosystem through the Singapore Exchange. The exchange launched a kilobar gold contract in 2014, though it was suspended in 2018 following limited trading activity.

 

Despite earlier challenges in building a futures market, Singapore retains structural advantages as a bullion logistics center. The government eliminated goods and services tax on investment-grade precious metals in 2012 in an effort to attract international gold flows and vaulting activity.

Domestic banks are also expanding their capabilities in the physical market. UOB currently offers physical gold sales and vaulting services to retail investors, while OCBC has indicated it is evaluating a custody business for institutional and high-net-worth clients seeking secure bullion storage.

MAS confirmed that discussions with industry participants are ongoing and that additional initiatives may be announced as the project develops.

“Since last year, MAS has been actively working with key gold market participants to look at ways to support the growth of the gold market in Singapore.”

Market participants caution that the initiative remains in early stages and that final policies or infrastructure decisions have yet to be determined.