Hong Kong is accelerating its plan to establish an international gold trading hub, with a new gold settlement system targeted for launch before July this year. According to informed sources, the government-owned system will be modeled on the financial infrastructure of London, the world's largest gold market, allowing participants to settle trades through "bearer gold accounts." These accounts enable faster and larger-scale transactions, which are crucial for market liquidity. Clients would not need to hold specifically numbered gold bars but would hold a claim on a quantity of gold with the settlement institution. Most precious metals traded in the London market are currently settled in this manner. To support the launch, Hong Kong has invited several central banks to participate, aiming to strengthen its role as a center for gold trading, financing, and storage. Authorities have previously signed a cooperation agreement with the Shanghai Gold Exchange and plan to expand gold storage capacity to 2,000 tonnes within three years. The Hong Kong Financial Services and the Treasury Bureau, responsible for the project, stated via email that preparatory work is "in its final stages, with a trial run of the settlement system expected to commence within the year." Two sources indicated the system has attracted significant industry interest, particularly from traders and financial institutions seeking alternative trading channels in Asia, home to the world's two largest gold consumers, China and India. Last month, the Hong Kong government announced that the board of the Hong Kong settlement company includes 11 banks, comprising five Chinese banks and six international banks, such as Industrial and Commercial Bank of China, Bank of China, HSBC Holdings, JPMorgan Chase, and UBS Group. Among them, HSBC, JPMorgan, UBS, and ICBC Standard Bank are also co-owners and operators of the London settlement system.
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