Singapore considers adding gold storage for global central banks: Sources

SINGAPORE - Singapore is considering additional gold storage space to accommodate other central banks’ holdings, as part of a broader push to establish the nation as a bullion trading hub.

The Republic is evaluating potential locations, including a plot of land near Changi Airport, according to people with knowledge of the matter, declining to be named as the discussions are confidential. 

The central bank “is considering the use of our existing facilities for the vaulting of gold”, a spokesperson from the Monetary Authority of Singapore said in response to queries, but did not comment on whether it would enlarge its vault. 

The authorities in the country have announced a plan with a local industry group to develop services and products to boost the precious metal’s trade, including a clearing system for over-the-counter settlement as well as capital market products.

Bullion vaults are often located in places with secure and efficient links to airports, where metal can be easily flown in or out, while minimising the amount of time that bullion is on the road. 

Attracting central banks – the ultimate providers of liquidity given the large volumes of gold they hold in reserves – will be key to Singapore’s plans, along with support from established financial institutions that serve as market makers. Together, these form the backbone of the world’s dominant gold-trading hub – London – where billions of dollars’ worth of the metal is traded every day.

Monetary authorities globally hold nearly 39,000 tonnes of bullion, or about 18 per cent of all gold ever mined, according to the World Gold Council. Even a small share of that market would bolster Singapore’s influence in regional trade that is currently dominated by Hong Kong, the gateway for precious metals going in and out of China, the world’s largest consumer. BLOOMBERG