Hong Kong Woos Central Banks to Become Gold-Trading Hub

Fri Mar 27 2026

Hong Kong is inviting a number of China-friendly central banks to participate in its gold-clearing system as part of a push to elevate the city as a major bullion-trading hub. The city is targeting countries already engaged in Beijing’s Belt and Road initiative to supply the institutional clout needed to position Hong Kong as an alternative center to London, according to people familiar with the matter, who asked not to be named discussing sensitive matters. They did not specify which central banks had been invited.

The drive by Hong Kong will complement Beijing’s recent efforts to woo sovereign nations to store gold in mainland China, and is part of a broader strategy to extend the international appeal of the Chinese yuan as an investable asset, the people said. “We welcome opportunities of collaboration with different economies in gold market development,” a spokesman for Hong Kong’s Financial Services and the Treasury Bureau said in an emailed statement. “We believe that regional cooperation and complementary development can benefit the broader gold trading ecosystem as a whole.”

Hong Kong’s close ties with China and its international orientation position it as a two way bridge to global markets, connecting overseas investors with onshore opportunities while helping Chinese entities access international markets, the spokesman added. A public campaign unveiled this year promotes the special administrative region as a trading, financing and storage hub for gold, with a government-run clearing system slated to begin trials this year. Hong Kong also signed a cooperation pact with the Shanghai Gold Exchange and reiterated a pledge to expand gold-storage capacity to 2,000 tons within three years.

Securing the buy-in of central banks – the ultimate providers of liquidity, given the large volumes of gold held in reserves – could give a significant boost to Hong Kong’s ambitions, along with support from established financial institutions that serve as market-makers. Together, they form the backbone of the world’s dominant gold-trading hub — London — where billions of dollars’ worth of the metal is traded every day.

Hong Kong is also likely to meet stiff regional competition — Singapore, for example, is planning to expand its gold-storage capacity to become a custodian of bullion held by foreign central banks. It has tapped local and international banks including JPMorgan Chase & Co. and UBS Group AG to boost liquidity and make the most of demand from wealth investors.

Gold has retreated sharply since the start of the war in the Middle East, which precipitated a broad selloff to meet margin calls elsewhere and has fanned concerns of inflation as energy prices spike. Many investors, however, continue to see bullion as a long-term store of value after a prolonged rally underpinned by central-bank buying.

Source: https://financialpost.com