Singapore has launched a new gold storage service for foreign central banks and international financial institutions as the city-state moves to strengthen its position in the global gold trading market.

The Monetary Authority of Singapore (MAS) announced that the facility, located inside the country's national currency vault, will initially have the capacity to store up to 500 tonnes of gold. The capacity could be expanded in response to growing demand.

According to MAS, the service will provide foreign central banks, international financial institutions and sovereign entities with a secure option for holding their gold reserves in Singapore.

Selected bullion banks based in Singapore that provide gold-related services to these institutions will also be eligible for special gold custody accounts.

The initiative comes as Singapore seeks to benefit from increasing demand for gold trading and storage services across Asia.

The move follows Hong Kong's launch of a trial gold-clearing system in July, supported by several major banks as the financial hub seeks to expand its role in international bullion trading.

Singapore already has commercial gold storage facilities with a combined capacity of more than 2,000 tonnes, serving bullion banks, institutional investors and wealthy individuals.

Asia's Growing Influence in the Global Gold Market

Gold remains an important reserve asset for central banks and is widely considered a safe-haven investment during periods of financial uncertainty.

Singapore is aiming to strengthen its position in a market traditionally dominated by established trading centres such as London and New York.

In June, Singapore Deputy Prime Minister Gan Kim Yong said Asia accounts for approximately 70 percent of global annual consumer gold demand, indicating a shift in the centre of gravity of the international gold market towards the region.

He also identified China and India as the leading contributors to global demand for gold bars and coins in the previous year.

However, the region's gold-market infrastructure has not developed at the same pace as its demand, creating opportunities for Singapore to establish itself as a major trading and storage hub.

Tax Incentives and New Gold Trading Infrastructure

Alongside the new storage facility, MAS announced plans to expand goods and services tax exemptions for selected wholesale gold-market activities.

The joint initiative with Singapore's finance ministry will cover activities such as gold storage, refining, assaying and broking. The expanded exemptions are expected to take effect from April next year.

MAS said the measures would help develop a stronger gold-market ecosystem, improve price discovery and support risk management during Asian trading hours.

Meanwhile, the Singapore Exchange and six founding clearing banks are preparing to introduce an over-the-counter gold-clearing system.

Live trading through the new system is expected to begin in the first quarter of 2027.

Through these initiatives, Singapore aims to strengthen its position in the international bullion market and attract more global institutions seeking secure gold storage and trading services.