Singapore will set up an over-the-counter (OTC) gold clearing system for Loco Singapore physical gold stored in the country by the end of 2026 to enhance its role as a global gold trading hub. The Singapore Exchange (SGX) will operate the clearing platform, with six banks—DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB—serving as clearing members, the Monetary Authority of Singapore (MAS) announced on June 15 at the Asia-Pacific Precious Metals Conference [1, 2, 3, 4, 5, 6, 7].
The OTC clearing system will follow global standards including the London Bullion Market Association Good Delivery framework and settlement practices used by CME and the Shanghai Gold Exchange for kilobars. SGX is also exploring relaunching a physically deliverable gold futures contract to improve price discovery and risk management for Loco Singapore [2, 3, 4, 7].
MAS plans to introduce central bank gold vaulting services by October 2026, enabling foreign central banks and sovereign entities to securely store and actively manage their gold reserves in Singapore. MAS will extend gold accounts to select Singapore-based bullion banks to enhance gold-related services and liquidity for these institutions [2, 3, 4, 5, 6].
Additionally, MAS will remove a 5% cap on physical investment precious metals under tax-incentive schemes for eligible funds and family offices, allowing greater portfolio diversification into physical gold. Detailed information on this tax cap removal is expected by September 2026 [2, 3, 4].
Deputy Prime Minister and MAS Chairman Gan Kim Yong said, "We are not seeking to replace established centres of gold trading and liquidity. Instead, Singapore can serve as a trusted node in the global gold ecosystem." He added, "This strengthens Singapore’s proposition as a jurisdiction where reserve assets can be securely held, actively managed, and connected to wider market liquidity during Asian trading hours," noting that "market participants are seeking more efficient ways to access liquidity, manage risk and settle transactions during Asian trading hours" [1, 2, 3].
The development increases competition with Hong Kong, which is preparing its own gold clearing system expected by July 2026. David Tait, CEO of the World Gold Council, remarked, "Singapore probably has an edge [over Hong Kong] because it’s... offering itself to the central banks of the world for custody, which I think is going to be pivotal" [2, 4, 5, 6, 7].
Bank-to-bank OTC gold transactions using the clearing system are expected to progressively begin in 2027 [8, 5, 6, 7].
