Singapore opens 500-tonne gold vault to challenge global bullion hubs

Singapore has launched a gold storage service for foreign central banks and other financial institutions, taking another step towards becoming a major global bullion-trading hub.

The Monetary Authority of Singapore (MAS) said on Tuesday that the facility, located inside the city-state’s national currency vault, has an initial capacity of 500 tonnes, with room for expansion as demand grows.

The service will offer foreign central banks, international financial institutions and sovereign entities a secure option for holding gold reserves in Singapore. Selected Singapore-based bullion banks will also be able to access gold custody accounts.

The launch comes as Singapore seeks to capitalise on rising demand for gold trading and storage across Asia, a region that accounts for roughly 70 per cent of global annual consumer gold demand, according to Deputy Prime Minister Gan Kim Yong.

Singapore steps up challenge to established gold hubs

Singapore already has commercial vaulting capacity exceeding 2,000 tonnes, serving bullion banks, institutional investors and wealthy individuals.

But the city-state is seeking to expand its influence in a market long dominated by established trading centres such as London and New York.

Hong Kong is also stepping up efforts to attract bullion business, having launched a trial gold-clearing system in July with backing from several major banks.

Gan said Asia had become the centre of gravity for gold demand, with China and India among the leading contributors to purchases of bars and coins last year. However, he warned that the region's gold-market infrastructure had lagged behind demand, leaving a gap in trading services during Asian hours.

Tax incentives and clearing system planned

Singapore is also preparing further measures to strengthen its bullion market.

The MAS said a joint initiative with the finance ministry would expand goods and services tax waivers for specified wholesale gold-market activities, including storage, refining, assaying and broking. The changes are expected to take effect in April next year.

Meanwhile, the Singapore Exchange and six founding clearing banks are preparing to launch an over-the-counter gold-clearing system, with live trading expected to begin in the first quarter of 2027.

The MAS said the measures would help build a deeper gold market, improve price discovery and strengthen risk management during Asian trading hours.

Gold is traditionally regarded as a safe-haven asset during periods of financial instability and is held by central banks as part of their international reserves.

TRT World and Agencies — TRT World and Agencies

Photo: Reuters