Two of Asia's heavyweight financial centers used the London Bullion Market Association's annual meetup in Sorrento, Italy to make their case to the industry's biggest crowd. With more than 1,000 traders, investors and delegates in the room, Hong Kong's Christopher Hui, secretary for Financial Services and the Treasury, and Singapore's Lim Cheng Khai, executive director for financial markets development at the Monetary Authority of Singapore, laid out rival plans to pull more of the world's gold business east.
Both cities want to tap into the established bullion ecosystem by introducing new contract offerings and operational services, such as hosting central bank reserves. Each says local and international banks are already signed up.
Hong Kong has begun putting pieces on the board. In July, it launched a trial clearing platform for gold and introduced a new price benchmark. "We are positioning ourselves as a super-connector and also a super value-adder," Hui said on a panel. He later framed the effort as building on a broader diversification trend rather than trying to reinvent the market.
Hui added that Hong Kong plans, near the end of the year, to reveal specifics of offshore-yuan gold futures and to enable banks to complete physical transactions instantly and in multiple currencies. The push also has a political edge: the city, already the world's largest offshore yuan hub, wants to use gold to spur wider use of the Chinese currency, with potential collaboration from China-friendly gold producers such as Uzbekistan. That proximity cuts both ways. Centalion's Gregory Frith said he likes Hong Kong contracts, but some traders may feel more comfortable operating in Singapore.
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This race is riding a broader move to diversify where and how reserves are held, including some central banks repatriating gold, which chips away at London and New York's dominance. Even a modest portion of the 39,000 tons that central banks hold worldwide would meaningfully raise either Asian center's influence because reserves can add key liquidity by being lent to commercial institutions.
Tailwinds are there. Bundesbank president Joachim Nagel said rising government debt levels make it more compelling for central banks to boost gold holdings. And in June, the World Gold Council surveyed 74 central banks and found that 45% intend to purchase within the next year, the highest share since the study began in 2018.
Plenty of insiders think both Hong Kong and Singapore can thrive given how deep global bullion liquidity runs. The tougher challenge is convincing traders to shift away from long-entrenched benchmarks and venues. As Frith put it, "If you talk to anyone, anywhere on the planet, what do you benchmark the price against? It's the LBMA fix." His take on progress: "How do you evolve from that? You have to try and get ahead of the curve."
Keep an eye on Hong Kong's timeline toward the end of the year and Singapore's plan to roll out central bank vaulting, because where liquidity gathers often shapes where prices and opportunities follow.
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