Beginning in October, Singapore will permit foreign central banks and sovereign entities to store their gold reserves within its borders. This move is aimed at reinforcing Singapore’s standing as a regional hub for gold trading and storage. The city-state’s commercial vaulting capacity currently surpasses 2,000 tonnes. This capacity is utilized by a diverse array of market participants including bullion banks, institutional investors, and high-net-worth individuals, as expressed by Deputy Prime Minister Gan Kim Yong on a recent Monday forum.
In addition to providing secure storage, Singapore will cater to foreign central banks and sovereign entities desiring to actively manage their gold holdings. The Monetary Authority of Singapore plans to offer gold accounts to a select group of bullion banks based in Singapore. This initiative will enhance their capability to deliver gold-related services and liquidity to these entities.
Deputy Prime Minister Yong believes that this move will enhance Singapore’s reputation as a safe and reliable jurisdiction where reserve assets can be securely held and actively managed. The city-state will also be able to connect these assets to wider market liquidity during Asian trading hours, further reinforcing its regional dominance.
Several innovative measures have also been announced to strengthen Singapore’s role in the global gold market. One significant measure includes the establishment of an over-the-counter gold clearing system by the Singapore Exchange by the end of 2026. Interbank trading is anticipated to grow from 2027 onwards.
This revolutionary system aims to enhance trade processing, boost transparency, and support more efficient clearing and settlement. According to Yong, this will instill greater confidence in market participants to transact in Singapore. The new system will accommodate both large bars and kilobars, enabling standardized settlement during Asian trading hours.
Large bars refer to 400-troy-ounce gold bars or approximately 12.4 kilograms, which are standard for institutional trading and settlement in London. Kilobars, on the other hand, are 1-kilogram bars that are popular in Asian markets and are accepted for delivery in Comex gold futures contracts in the U.S.
DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB have been reported as the six banks that will join as clearing members and contribute to the development of Singapore’s gold market.
What will Singapore allow from October?
Starting from October, Singapore will allow foreign central banks and sovereign entities to store their gold reserves in the country.
What benefits will the proposed gold clearing system bring to Singapore’s gold market?
The proposed over-the-counter gold clearing system will streamline trade processing, enhance transparency, and support more efficient clearing and settlement, thereby bolstering market participant confidence to transact in Singapore.
Which banks will be joining as clearing members to develop Singapore’s gold market?
DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB are set to join as clearing members to help develop Singapore’s gold market.
