The removal of the 5% cap is the most structurally significant element for gold flows: eligible funds and family offices in Singapore have been constrained in their physical allocation and lifting that ceiling opens meaningful incremental demand from one of Asia’s deepest pools of managed capital. The central bank vaulting announcement by October is a direct play for sovereign and reserve manager gold held elsewhere in the region, with the Asian trading hours liquidity argument an explicit pitch against both London and Zurich. The OTC clearing system with six founding members, including JPMorgan, Deutsche Bank and the three major Singapore banks, gives Loco Singapore the institutional architecture it has lacked as a pricing benchmark. Hong Kong is moving in the same direction on gold futures, and the competitive dynamic between the two centres will accelerate the development of Asian-hours gold price discovery as an alternative to the London fix. Physically deliverable futures, if launched, would be the capstone.
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Singapore will remove the 5% fund gold cap, launch OTC Loco Singapore clearing with six banks, introduce central bank vaulting by October and explore physically deliverable gold futures.
Summary:
Source: Deputy Prime Minister Gan Kim Yong, Asia-Pacific Precious Metals Conference; Reuters
- MAS will remove the 5% cap on physical precious metals investment under tax-incentive schemes for eligible funds and family offices
- SGX will establish an OTC gold clearing system for Loco Singapore by year-end, with DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC and UOB as founding clearing members
- MAS will introduce central bank gold-vaulting services by October for foreign central banks and sovereign entities
- SGX is exploring a physically deliverable gold futures contract to support price discovery and risk management in Loco Singapore
- The moves follow a working group established earlier this year and sit alongside DBS launching tokenised physical gold for retail clients and OCBC offering institutional gold storage
- Hong Kong is separately exploring a relaunch of gold futures as regional competition for gold hub status intensifies
Singapore has unveiled a package of measures designed to position the city-state as the dominant gold trading hub in Asia, with Deputy Prime Minister Gan Kim Yong announcing the removal of a longstanding investment cap, a new OTC clearing system and central bank vaulting services at the Asia-Pacific Precious Metals Conference on Monday.
The most immediate change for capital flows is the removal of the 5% ceiling on physical precious metals investment under MAS tax-incentive schemes for eligible funds and family offices. The cap has constrained how much managed money in Singapore could be allocated to physical gold, and its removal opens the door to substantially larger allocations from one of the region’s most concentrated pools of institutional and private wealth.
The Singapore Exchange will establish an over-the-counter clearing system for Loco Singapore, referring to physical gold stored in Singapore, before year-end. Six institutions will serve as founding clearing members: DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC and UOB. The clearing infrastructure gives Loco Singapore the settlement backbone required to function as a credible benchmark alongside London and Zurich.
The Monetary Authority of Singapore will introduce central bank gold-vaulting services by October, targeting foreign central banks and sovereign wealth entities seeking secure storage connected to Asian trading hours liquidity. Gan framed the offering explicitly as a reserve asset proposition, a direct pitch to institutions currently holding gold in Western time zones.
SGX is also examining a physically deliverable gold futures contract, which would add price discovery and hedging utility to the Loco Singapore market. Hong Kong is pursuing a parallel path, with HKEX exploring a gold futures relaunch, making the race for Asian gold hub primacy a two-city contest with real momentum on both sides.