Singapore has launched a gold vaulting service for foreign central banks and official institutions, seeking to tap growing demand to diversify where bullion reserves are stored. The precious metal will be stored in the city-state's national currency vault, which has capacity for as much as 500 tons, with room to expand as demand grows, the Monetary Authority of Singapore said in a statement on Tuesday.
Deputy Prime Minister and MAS Chairman Gan Kim Yong told reporters that Singapore does not aim to replace other gold centers, but central banks are looking for alternatives to strengthen their reserves. Foreign central banks had expressed interest in storing gold in Singapore, though Gan declined to identify the countries or institutions.
Singapore has been building its gold-market infrastructure in recent months to capture a larger share of global trade and establish itself as a hub for the precious metal. Its plans include an over-the-counter clearing system with participation from JPMorgan Chase & Co. and Deutsche Bank AG, as well as enhanced logistics and more bullion-linked financial products. Industry testing of the clearing system has been completed, with live trading and market operations expected to start in the first quarter of 2027. Separately, the launch of the Singapore Exchange's physically deliverable gold kilobar futures is targeted for the second quarter of next year.
The vaulting service comes amid heightened demand for gold from both institutional investors and central banks, which have accumulated the metal at a rapid pace in recent years. Geopolitical tensions and concerns over swelling government debt have enhanced bullion's appeal as a haven. MAS said it would also offer gold custody accounts to select Singapore-based bullion banks, and will extend a Goods and Services Tax waiver to some wholesale investment precious metal-related services.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing