Singapore plans to expand its vaults, targeting foreign central banks' gold reserves

Hot Topics

            My Stock Watchlist
Data Center
Market Center
Capital Flow
Simulated Trading
        

        Client

Source: Jin Ten Data

Singapore is planning to expand its gold storage facilities, aiming to become a custodian for gold bars held by foreign central banks. This is part of the country’s broader efforts to compete for a regional precious metals hub status.

The Monetary Authority of Singapore stated on Friday that it will “seek to provide vault services for foreign central banks and sovereign entities to meet potential demand.” The authority is also developing “gold-related capital market products to promote price discovery and build liquidity.”

In addition, according to a joint statement from the Monetary Authority of Singapore and the Singapore Bullion Market Association, the authority plans to establish a clearing system to support the settlement operations of local gold over-the-counter trading.

As investors seek alternative wealth preservation methods, driving gold prices to historic highs, Singapore aims to become a major gold trading hub. Despite a recent decline in gold prices since the outbreak of the Middle East conflict, many central banks have continued to increase their gold holdings in recent years to hedge against the risks posed by the dollar’s dominance.

As part of the initiative, the Singapore government has formed a working group that includes JPMorgan, UBS, as well as DBS Bank, UOB, and Industrial and Commercial Bank of China. Bloomberg News first reported on this plan earlier in March.

Attracting central banks will be a key aspect of Singapore’s plan—central banks hold significant gold reserves and are the ultimate providers of liquidity. Additionally, the plan also relies on the support of established financial institutions acting as market makers. Together, they form the backbone of the world’s dominant gold trading center—London, where daily gold trading volumes reach billions of dollars.

According to the World Gold Council, central banks around the world hold nearly 39,000 tons of gold bars, accounting for about 18% of all the gold ever mined historically. Even capturing just a small portion of this market would enhance Singapore’s influence in regional trade. Currently, this trade is dominated by Hong Kong, which serves as the gateway for precious metals into and out of China, the world’s largest gold consumer.

Chee Hong Tat, Deputy Chairman of the Monetary Authority of Singapore and Minister for National Development, stated at a briefing on Friday that “this market space is large enough for us to coexist, and both cities can develop their respective service businesses.” He noted that central banks and investors “view gold as an asset that can provide assistance in more uncertain environments.”

Singapore’s proposal is expected to attract countries that question the traditional hub status and credibility of London and New York. Several countries, including Germany, have repatriated their gold for security reasons, with Poland, the Netherlands, and Serbia taking similar actions.

According to the Monetary Authority of Singapore, as of January, Singapore’s gold reserves stood at 193.6 tons.

 Sina Cooperative Large Platform Futures Account Opening Secure and Fast Guaranteed

Massive information, precise interpretation, all in the Sina Finance APP

Editor: Zhu Henan