Gold Storage Initiatives in Singapore and Hong Kong

At the center of a major security storage facility sits one of the largest safes for precious metals globally. With aspirations to become the epicenter of gold trade, Singapore faces challenges in realizing this ambition.

As gold prices fluctuate, the company managing Singapore’s reserves aims to lease space to private banks and family offices. This allows wealthy clients to securely store gold and silver bullion just a short distance from one of Southeast Asia’s busiest airports.

Despite the reserve’s capacity to house 10,000 tons of silver and 500 tons of gold, only a fraction is used currently.

“We are excited to provide an extensive range of services,” stated Albert Chen, CEO of the Singapore Bullion Market Association. “There’s much to be done, but it won’t take long.”

Geopolitical tensions are pushing gold prices higher, and major markets like Singapore and Hong Kong are trying to disrupt the dominance of storage, refinement, and trading traditionally held by London, New York, and Switzerland.

New reserves and storage facilities in Hong Kong reflect these ambitions. This past summer, the city initiated gold futures contracts, enhancing its capabilities for bullion storage and refinement.

“The core of gold trading is increasingly shifting east,” remarked David Greely, chief economist at Abaxx Exchange. The appetite for trading hubs in Asia is significant, he added.

Recent disruptions in the market due to US tariffs on gold have spurred interest in regional hubs. In August, the announcement of tariffs on gold bars startled many, but just days later, the policy was reversed by President Trump.

“There’s an opportunity to explore the growing accessibility of these hubs,” noted Nicky Shiels, research director at MKS Pamp, a Swiss refinery with a regional office in Hong Kong.

Efforts to position Singapore as a global gold hub have been underway for over ten years, though Hong Kong has been intensifying its initiatives lately.

During his annual policy address on September 17, city leader John Lee announced plans to boost Hong Kong’s gold storage capacity to over 2,000 tons within three years, aiming to establish a “regional gold reserve hub.” The current capacity exceeds 200 tons.

With its proximity to mainland China, where Hong Kong is a key consumer and producer of gold, it stands out as a natural hub for bullion trade. The Shanghai Gold Exchange is using Hong Kong to introduce gold contracts to international investors.

In June, the SGE inaugurated its first offshore vault in Hong Kong, facilitating the launch of new gold contracts. However, breaking into the market can be challenging, regardless of where a contract is initiated.

Several international refineries, like Heraeus and Metalor, have set up operations in Hong Kong, and MKS Pamp has participated in launching a new contract for SGE.

Yet, some traders express concerns about potential political interference. “There’s always this worry—is it a genuine international market, or can the rules change if it doesn’t align with the Chinese government’s preferences?” questioned Robert Gottlieb, a former top gold trader.

Adrian Ash, head of research at Gold Trading Platforms, indicates that political neutrality in Singapore was a key reason for BullionVault’s choice of location over Hong Kong.

Both regions are working hard to enhance liquidity, storage, and settlement services to vie with established financial centers. “In this industry, increasing liquidity is crucial,” Ash remarked.

Hong Kong still has significant ground to cover compared to Singapore in terms of storage facilities. The 30,000 square meter LE Freeport, known as the “Fort Knox of Singapore,” has been operational since 2010, originally managing luxury goods before focusing on precious metal storage. Companies like Brink’s and Loomis utilize these facilities.

“On some fronts, Singapore is ahead, but Hong Kong has an edge in deal-making,” Gregorsen commented.

“Both hubs recognize that the global landscape is evolving and they must reassess their positions regarding gold,” he concluded.