DBS said in an emailed reply on Wednesday that it expanded vaulting capacity this year to meet stronger interest from both wealthy individuals and institutions. Oversea-Chinese Banking Corp. Ltd. has been in touch with precious metal storage firms to secure additional space, and Deutsche Bank AG is evaluating a similar move, according to people familiar with the talks. The potential scale is still being negotiated and could change.
A spokesperson for Deutsche Bank said the bank would not be commenting. According to an OCBC spokesperson, the bank has seen "steady interest" since entering the physical gold business, particularly among private banking clients. A spokesperson for the Monetary Authority of Singapore directed questions to a previous speech by the Deputy Prime Minister outlining plans to roll out a local gold clearing system.
Banks often hire specialist logistics firms to handle storage and transportation, though some run their own vaults - Singapore-based United Overseas Bank Ltd. is one example. Those third parties lease space in private high-security sites such as Le Freeport, nicknamed "Asia's Fort Knox" and owned by a crypto billionaire.
Le Freeport's operator said in May that demand has been climbing and the basement vault area is close to full. Several people familiar with the situation said some banks may be unable to place bullion in the basement, which is preferred because security is tighter and the floors can bear more weight, so the heavier load-bearing floors in the basement can accommodate a greater number of bars than upper stories.
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Expanding vault space is a key part of Singapore's effort to launch a domestic gold clearing system, which means clearing banks must have capacity to handle and settle large quantities of metal. People involved in the talks said Singapore is also weighing a domestic reference price for gold that is traded and cleared in the city, similar to Hong Kong's HAU ticker that went live in July.
Singapore's ambitions mirror a regional push. Hong Kong began testing its clearing platform in July and is actively seeking participation from overseas banks to store gold in the city. It has also promised to raise overall storage to 2,000 tons within three years. For now, operators say privately run facilities in Singapore can accommodate at least 2,200 tons, split between 1,700 tons at Le Freeport and 500 tons at The Reserve.
More vaults, a clearing system, and a potential local price marker all point to tighter trading and settlement in Asia, plus easier access to physical metal. If Singapore cements itself as a bullion hub alongside Hong Kong, expect more competition on storage and services - which can influence costs and convenience for anyone looking to hold or trade gold.
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