Singapore launches OTC gold clearing hub with six banks

Singapore will establish an over-the-counter (OTC) clearing hub for physical gold stored on the island, backed by six global banks, the Singapore Exchange and the Monetary Authority of Singapore announced. The OTC clearing system is planned to be operational by the end of 2026, with central bank vaulting services starting in October.

Six banks have signed on as clearing members: DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC and UOB. The clearing system will allow participants to clear trades in physical gold held in Singapore, and interbank trading is expected to develop from 2027 as the market infrastructure is expanded.

The Monetary Authority of Singapore will offer gold-vaulting services for foreign central banks and sovereign entities from October. The authority will also remove a 5% cap on physical precious metal holdings under certain tax-incentive schemes, giving eligible funds and family offices wider scope to allocate to physical metal held on the island.

Deputy Prime Minister Gan Kim Yong described the aim as to ‘serve as a connecting node during Asian hours.’ He presented the package on June 15 and framed it as a way to improve trading liquidity during hours when global price-setting is concentrated outside Asia.

Industry data show about 70% of annual global gold demand is driven by Asian consumers, while price-setting and much of the benchmark trading remain centered in London and New York. Market participants note that OTC models can suit large institutional trades by providing flexibility on timing and execution.

Hong Kong is preparing its own gold clearing system, targeting a July launch and the relaunch of gold futures, creating a competing option for regional clearing flows. Banks in Singapore are already readying products linked to the new infrastructure: DBS is developing tokenized physical gold for retail customers and OCBC offers institutional clients the ability to buy, sell and store physical gold in Singapore.

How much trading flow the Singapore hub attracts relative to other regional centres will depend on launch timing, adoption by market participants and the development of interbank liquidity from 2027.