Singapore opens 500-tonne gold vault in bid for bigger share of bullion trade
Singapore's central bank opened its national currency vault to foreign central banks' gold, with room for 500 metric tons, as the city-state builds clearing, tax breaks and futures for a bigger share of bullion trade.
What happened
The Monetary Authority of Singapore launched a gold vaulting service on Tuesday for foreign central banks, international financial institutions and sovereign entities. The gold will sit in Singapore's national currency vault, which has room for 500 metric tons, with space to expand as demand grows.
Deputy Prime Minister Gan Kim Yong, who also chairs the Monetary Authority of Singapore, said developing the gold market extends Singapore's role as a trusted financial centre. He said some foreign central banks had already shown interest, without naming them because the talks are confidential.
- Initial vault capacity500 metric tons
- Singapore commercial vault capacitymore than 2,000 tonnes
- Gold in London vaults, end of Octoberabout 9,850 metric tons
- Asia's share of global consumer gold demandabout 70%
- Clearing banks in the SGX system6
The wider build-out
The vault is one part of a broader push. The Singapore Exchange and 6 clearing banks — DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC and UOB — are preparing an over-the-counter gold clearing system, with live trading to start in Q1 2027. The exchange also plans physically deliverable gold kilobar futures for Q2 2027.
The Monetary Authority of Singapore and the Ministry of Finance will also introduce an enhanced tax framework from April 2027, waiving tax on wholesale gold services such as vaulting, refining, recasting, assaying and broking. The authority will remove a 5% cap on physical investment precious metals under tax-incentive schemes for eligible funds and family offices.
Why Singapore wants in
Asia accounts for about 70% of annual global consumer gold demand, with China and India the biggest contributors. Singapore already has more than 2,000 tonnes of commercial vault capacity, serving bullion banks, institutional investors and high-net-worth individuals.
London remains the benchmark: its vaults held about 9,850 metric tons of gold at the end of October. Hong Kong is also expanding its gold storage and clearing infrastructure, using its proximity to China, the world's largest gold market. Some analysts are skeptical: Juerg Kiener of Swiss Asia Capital said Singapore arrived late to the contest and that building a physical hub needs trading volume.
What to watch
The test now is whether foreign central banks move reserves into Singapore's vault, and whether the clearing system starts on time in Q1 2027. The tax changes from April 2027 are meant to draw more wholesale trading to the city-state.
If the pieces come together, Singapore would have storage, clearing, tax treatment and futures in one place. This post summarizes reported facts and our view of the risks involved. It is not a forecast and not investment advice.
