Singapore is establishing itself as Asia's gold trading hub, claiming it can coexist with Hong Kong.

Singapore plans to position the country as Asia’s gold trading hub, taking a range of measures including improving its ability to store gold for foreign central banks, developing capital-market products related to gold, and establishing a more robust clearing system; and it also believes that the market is big enough for Singapore and Hong Kong to coexist, with each playing to its strengths.

Singapore’s Minister of State for National Development and Deputy Chairman of the Monetary Authority of Singapore, Chee Hong Tat, said it would not place bets on short-term price movements, adding that what the authorities are doing is actually to create an ecosystem in which gold trading activities are based in Singapore.

Chee Hong Tat said gold trading, beyond Singapore’s existing businesses such as wealth management and asset management, adds a new economic pillar. This will help build a more attractive financial center while creating more high-quality job opportunities for Singaporeans.

The Monetary Authority of Singapore (MAS) and the Singapore Bullion Market Association (SBMA) said they have identified four key focus areas: expanding the range of capital-market products related to gold; building a trustworthy clearing and settlement system; strengthening vault and logistics standards; and studying vault services for foreign central banks and sovereign entities.

Singapore is currently one of many Asian financial centers competing to attract more gold inflows and promote gold trading business, while Hong Kong is also working to expand linkages between the gold markets of Hong Kong and Shanghai. In the face of competition from Hong Kong, Chee Hong Tat said that although there is some overlap in the customers served and market segments by the two places, they are not exactly the same; both can play to their respective strengths, and this market is big enough to allow coexistence.