Singapore Looks to Add Gold Sheen to Its Status as Financial Hub

By Megan Cheah

Last year, gold was one of the best-performing asset classes, setting a string of record highs as retail and institutional investors alike flocked to the precious metal.

Despite a pullback in prices this year amid heightened market volatility, Singapore is betting that gold-trading demand will continue and it wants a bigger piece of the action.

Singapore's central bank and its precious-metals industry association are looking at ways to strengthen the city-state's gold-trading ecosystem, echoing similar moves by rival financial hub Hong Kong.

A group set up by the Monetary Authority of Singapore and the Singapore Bullion Market Association will explore new ways to meet growing interest among investors to vault and trade gold in Singapore, they said Friday.

Potential options include developing gold-related capital market products, setting internationally aligned standards for vaulting and logistics, and building a clearing system to support over-the-counter settlement for trading gold bars in Singapore.

The MAS will also look at providing vaulting services for foreign central banks and sovereign entities, it said.

The group is co-chaired by the MAS and the bullion group, and is made up of private-sector stakeholders including lenders DBS Bank, ICBC Standard Bank, JPMorgan Chase Bank, UBS and United Overseas Bank, stock-exchange operator SGX Group, and the World Gold Council.

That follows a similar effort by Hong Kong to also boost its appeal as a gold-trading hub. The city recently signed a deal with the Shanghai Gold Exchange to foster gold trading, and is planning to expand its storage capacity for the yellow metal.

Chee Hong Tat, the MAS's deputy board chair, said there is likely room for more than one regional trading center for gold as rising uncertainty gives more investors reason to pivot to the safe-haven asset.

"I think the space is big enough for us to coexist and for both cities to be able to grow our respective services," said Chee, who is also Singapore's minister for national development. "There are some overlaps in the clients that we serve and the market segments that we target, but it's also not completely identical."

Though gold has traditionally benefited during times of uncertainty as a safe store of value, that hasn't been the case during the current period of geopolitical turbulence centered around the war in the Middle East.

The onset of the conflict changed gold's fortunes, causing a surge in energy prices that has raised alarm about an inflationary shock. That could limit room for central banks to lower rates. An environment of higher interest rates tends to tarnish the shine of the noninterest-bearing asset.

Recent gold price action shows that geopolitical tensions aren't enough to sustain the metal's rally, as safe-haven demand is largely overshadowed by higher energy prices and a stronger dollar, said ING commodities strategist Ewa Manthey in a recent note.

Still, any deeper correction in gold would likely attract buyers, particularly from central banks and longer-term investors, she added.

Singapore's move to boost its gold ecosystem isn't premised around the metal's near-term moves, Chee said, noting that building up the city-state's gold-trading capabilities would take time and close industry collaboration.

"We are not placing bets on whether the prices in the short term will go up or go down," Chee said.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

March 27, 2026 01:30 ET (05:30 GMT)