Asian jurisdictions jostle to become the region’s gold hub

Dubai, Hong Kong, Shanghai and Singapore are racing to become Asia’s gold hub as institutional demand shifts east, with each pursuing distinct strategies and drawing on different strengths to gain the edge.

Dubai

Dubai’s strength lies in its role as a physical trading and refining hub. It connects gold supply from Africa and Central Asia with demand across India and Southeast Asia. The Dubai Multi Commodities Centre benefits from zero value-added tax and no import duties, as well as a freeport regime that reduces friction for transit flows.

However, there are structural limits. Regulatory fragmentation across the United Arab Emirates, shallower institutional capital markets and geopolitical concerns create headwinds for deeper clearing and settlement volumes.

Dubai also lacks a common law court system, independent regulatory oversight structures, and the depth of financial services talent typically required by globally regulated institutions.

The emirate’s role as a wealth management centre has also come under pressure since war erupted in the Middle East, and it may take years to restore investor confidence. While Dubai is likely to remain important for physical flows and trade finance, it is less likely to rival Hong Kong or Singapore as a financial infrastructure centre.

Shanghai

The Shanghai Gold Exchange (SGE) is the world’s largest physical gold exchange by volume, supported by policy backing from the People’s Bank of China (PBOC) and direct access to China’s domestic demand. Its Au9999 contract functions as a renminbi-denominated benchmark for many commercial and retail transactions in China.

The SGE’s offshore vault in Hong Kong, operational since June 2025, creates a direct institutional link between Mainland demand and international storage and settlement infrastructure.

Despite its scale, Shanghai remains constrained by capital controls, regulatory opacity in some areas, and pricing mechanisms that are geared mainly towards domestic settlement rather than global benchmarking.

For institutions prioritising Mainland connectivity, the SGE is compelling. For institutions requiring international legal certainty and capital mobility, Shanghai remains only a partial solution.

In practice, Shanghai is likely to function more as an upstream partner to Hong Kong than as a direct competitor.

Singapore

While Hong Kong’s gold hub push gained formal momentum in late 2024, Singapore has been executing a coordinated, policy-backed strategy for more than a decade. Beginning in 2012 with an exemption on goods and services tax for investment-grade bullion, the city state has built an ecosystem centred on tax efficiency, world-class vaulting and regulatory alignment.

Vaulting capacity is one of Singapore’s key differentiators, with storage for at least 2,200 tonnes of gold across two world-class facilities.

Le Freeport, opened in 2010 adjacent to Changi Airport, is a dedicated high security facility for storing precious metals, art and collectibles, with capacity for at least 1,700 tonnes of gold. Global logistics firms, including The Brink’s Company, Loomis AB, and Malca-Amit Group, operate allocated Investment Precious Metals-compliant vaults within the complex.

The Reserve, Silver Bullion Company’s purpose-built facility, opened two years ago and is designed to store up to 10,000 tonnes of silver and 500 tonnes of gold. Silver Bullion functions as the dealer, vault operator and facility owner.

Another 15 private vaults across Singapore add an estimated 500 tonnes of storage.

The city state’s current structural constraint is refining. Metalor Technologies SA is the only major London Bullion Market Association (LBMA) Good Delivery-accredited refinery in the city state.

Hong Kong, by contrast, is leveraging a cross-border cooperation framework with Shenzhen, allowing gold imported from overseas to be refined in Mainland facilities and returned to Hong Kong duty-free.

On the trading side, Singapore is making progress in derivatives. Gold futures directly listed on the Singapore Exchange (SGX) historically struggled with low liquidity and were delisted.

More recently, Abaxx Exchange’s physically deliverable regional contracts have gained traction: its Gold Singapore Kilobar futures hit a weekly record of 54,740 contracts in March 2026. Still, most Asian-session gold derivatives volume remains anchored to the New York-based Commodity Exchange (COMEX).

Deputy Prime Minister Gan Kim Yong announced at a precious metals conference in June that the SGX will launch an over-the-counter gold clearing system by the end of this year, positioning it as “a trusted node in the global gold ecosystem” by standardising settlement in Asian time zones.

The system will support both large bars and kilobars, and Singapore will encourage institutional participation by lifting the 5% cap on physical precious metal investments for eligible funds and family offices.

Product access is also broadening. In March, Lion Global Investors launched Singapore’s first physically backed gold exchange-traded fund on SGX, and in April, OCBC Bank piloted Southeast Asia’s first on-chain tokenised physical gold fund. These products deepen domestic and wealth management demand, creating a more resilient liquidity base.

Strategically, Singapore’s strongest advantage is its positioning as a “trusted, neutral” jurisdiction for Asian and Global South institutions seeking exposure outside both Western and Chinese regulatory spheres.

The Monetary Authority of Singapore has been actively courting foreign central banks and sovereign wealth funds for vaulting services, leveraging political stability and rule of law certainty. It will begin offering gold vaulting services to them by October.

Where Hong Kong stands

Against this backdrop, Hong Kong has distinct competitive advantages. It combines direct connectivity to demand in China, potential for RMB settlement, and a government-backed clearing initiative designed to replicate key elements of London-style market infrastructure.

The SGE’s offshore vault in Hong Kong provides a physical bridge to the world’s largest market of gold consumers and producers, a link Singapore cannot easily replicate. For Chinese refiners, jewellery manufacturers and institutional buyers, it provides access to internationally certified gold custody while remaining jurisdictionally separate from China’s capital control constraints.

Hong Kong has also established a legal, regulatory and LBMA-aligned custody framework. This institutional maturity ensures that gold cleared and stored in the city can meet the stringent acceptance criteria of European and North American allocators, reducing the trust barriers that typically slow new hub development.

The realistic route

But London and New York are likely to remain the main anchors of global gold liquidity. So instead of trying to displace them, it’s more realistic to create a collaborative, multi-node regional network in Asia that connects more effectively with the global market infrastructure, as well as build liquidity depth, address time zone liquidity mismatches, and provide the geopolitical resilience increasingly sought by Asian investors.

Hong Kong can function as the China-linked settlement and financing bridge; Singapore can serve as the neutral custody, logistics and standards-aligned storage node; and Shanghai and Dubai can play specialist roles within the wider ecosystem.

Asia’s gold market is too large, fragmented and exposed to geopolitical shocks to be decided by a single winner. If Asian centres can converge on compatible vaulting standards, accepted bar formats and interoperable clearing practices, the region could develop a more resilient and efficient gold network rather than a set of isolated hubs.

For sophisticated allocators, including sovereign wealth funds, central banks and institutional investors, such a network would enable dynamic routing of flows based on settlement currency, bar size, regulatory preference and real-time liquidity conditions.

Beyond operational efficiency, integration would diversify custody exposure, absorb geopolitical shocks more effectively, and help generate the transaction volume required for credible price discovery during the Asian session.

The rollout in Hong Kong must be carefully sequenced, giving stakeholders and international investors a clear framework for monitoring progress.

The immediate priority is to finalise tax and stamp duty concessions for the Gold Central Clearing System, which began trial operations on July 7, while using a regulatory sandbox to allow participants to test clearing and margining without full licensing burdens.

In parallel, building an auditable operational record early will be critical for bank risk committees that need confidence before committing balance-sheet capacity.

Once the trial demonstrates resilience, attention must shift to deliberate liquidity seeding. Public commitments from anchor institutions, particularly PBOC-affiliated entities, Gulf sovereign wealth funds and tier-one LBMA market makers, will help signal whether sufficient depth can be sustained to attract broader institutional order flow.

The viability of Hong Kong’s gold hub will ultimately be proven by performance metrics — same-day settlement finality rates, bid-ask compression, and uptake of RMB-denominated transactions.

The longer-term differentiator will be cross-border connectivity. Linking clearing infrastructure to e-HKD and digital RMB pilots, and then evolving towards a gold-specific cross-border scheme akin to the Stock and ETF Connects would unlock Mainland institutional demand at scale.

The roadmap is defined and the implementation window is open. Hong Kong must now execute the gold hub programme with discipline and precision.

*This article was published by Asia Asset Management on August 31, 2026 titled “Amid a shift in demand, jurisdiction jostle to become Asia’s gold hub”.