Four Initiatives for Singapore Gold Trading Market: Clearing, Custody, Futures, and Tax Reform

Market interest in storing and trading gold is growing, but Asia's trading infrastructure still lags. To strengthen Singapore's position as a center, the country will take four measures to develop the gold trading market.

Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong announced this at the 9th Asia-Pacific Precious Metals Conference on June 15.

Gan noted that the center of gold demand is shifting further to Asia, which accounts for about 70% of global annual gold consumption demand. However, Asia's gold market infrastructure has not fully kept pace with this demand shift, with trading, liquidity, and price discovery still concentrated in established global centers such as London and New York.

Four Measures to Improve Asian Gold Market Infrastructure

Singapore introduces four measures, including setting up an over-the-counter gold clearing system, launching central bank gold custody services, developing gold-related capital market products, and adjusting the cap on physical investment precious metals under the fund tax incentive scheme.

1) Establish OTC Gold Clearing System by End of 2026

The Singapore Exchange (SGX) will set up an over-the-counter gold clearing system by the end of 2026, with interbank trading expected to develop gradually from 2027.

The system will streamline trade processing, increase transparency, and support more efficient clearing and settlement. It will support large bars (400 oz or 12.4 kg) and kilogram bars, providing standardized settlement during Asian hours.

The 400 oz bar is the standard for London trading and settlement. The kilogram bar is more common in Asian markets and is also an accepted unit in COMEX contracts.

2) Launch Central Bank Gold Custody Service by October This Year

The authorities will also launch a central bank gold custody service by October this year. Gan said Singapore already has strong commercial custody capabilities, with major service providers offering over 2,000 metric tons of secure storage space, serving precious metals banks, institutional investors, and high-net-worth investors.

The central bank gold custody service will complement existing capabilities, providing foreign central banks and sovereign entities with a secure option for storing gold reserves in Singapore, and leveraging the institutional standing of the Monetary Authority of Singapore (MAS) to enhance confidence.

Gan also mentioned that beyond secure storage, some foreign central banks and sovereign entities may want to actively manage their gold holdings. Therefore, MAS will offer gold accounts to certain Singapore precious metals banks, enabling them to better provide relevant services and liquidity to these entities.

3) Develop Gold-Related Capital Market Products

Singapore is advancing the development of gold-related capital market products. Gan said SGX is studying the launch of physically deliverable gold futures contracts. Banks also intend to develop tokenized gold applications in the local market, including collaboration through the Gold Bar Integrity initiative jointly launched by the World Gold Council (WGC) and the London Bullion Market Association (LBMA).

He said these initiatives will complement the OTC gold market and support broader investment and hedging needs. Over time, this will help deepen liquidity, strengthen price discovery, and improve the efficiency of gold as a tradeable financial asset.

4) Remove 5% Cap on Physical Investment Precious Metals Under Fund Tax Incentive Scheme

The authorities will remove the 5% cap on physical investment precious metals under the fund tax incentive scheme, allowing eligible funds and family offices more flexibility to diversify portfolios and support more capital allocation to physical gold in Singapore. MAS will announce further details by September.

Clearing Participants: Multiple Precious Metals Banks Sign MOU with SGX

Six precious metals banks, including DBS, OCBC, and UOB, as well as Deutsche Bank, ICBC Standard Bank, and J.P. Morgan, have signed a Memorandum of Understanding with SGX to participate in the plan as clearing members.

They will work with SGX to promote the development of Singapore's gold market.

Enhancing Singapore's Position as a Nodal Point for Gold Trading and Physical Trade

Gan said these initiatives are part of broader efforts to strengthen Singapore's role as a trusted global node for capital, investment, and physical trade flows. The measures will broaden Singapore's market, enabling institutions and companies to manage, preserve value, and trade with confidence over the long term.