Shaokai Fan, Head of Asia-Pacific of the World Gold Council, added the SAR and Singapore, which is also bolstering its gold trading capabilities, can complement each other and serve different markets.
After months of preparation, authorities have unveiled on Tuesday the city’s first gold clearing and settlement system which aligns with international standards, realising a goal set in the 2025 Policy Address.
The system is managed by the Hong Kong Precious Metals Central Clearing Company, a government-owned firm, with board members coming from 11 banks, regulatory bodies and the Shanghai Gold Exchange.
“It’s obviously a major step forward – having that infrastructure in place, having the system in place. It is going to help advance Hong Kong’s cause as a major gold trading centre,” Fan told RTHK in an interview.
The bullion veteran said Hong Kong could fill a void in the global gold market.
“So much gold consumption happens in Asia. The ultimate consumers of gold are in Asia. But the benchmark price that most of the world uses for gold is in London,” he said.
“Having a price benchmark set in the Asian time zone, I think, can be very helpful. That might be a role that Hong Kong can play.”
Singapore, too, wants a piece of the pie, as it aims to establish an over-the-counter gold clearing system by the end of 2026, according to Xinhua.
But Fan believes Hong Kong and Singapore aren’t necessarily competitors.
“If you look at Europe, for instance, London is the premier trading centre for gold, but you have Zurich as a major trading centre as well. These two are geographically close to each other, too, but they complement each other,” he explained.
“Traditionally, Hong Kong has always played this role as the gateway to China… Singapore has always been the hub for Southeast Asia. So they might end up playing different roles.”