Golden hour: why Hong Kong may finally succeed in becoming precious metal’s trading hub
For decades, Hong Kong has been a hub for gold jewellery. Brands such as Chow Tai Fook and Chow Sang Sang have drawn buyers from the world over, aided by the city’s duty-free status and its proximity to one of the world’s largest gold-consuming markets. Two years ago, when officials set the goal of making Hong Kong a global gold trading hub comparable to New York and London, it was met with…
Hong Kong has long been a premier destination for gold jewelry, thanks to its duty-free status and proximity to a prominent gold-consuming market in China. In 2023, officials set a goal to transform the city into a global gold trading hub, similar to New York and London. Skepticism surrounding this goal initially persisted, but it began to fade with the announcement of a central clearing and settlement system, as well as a delivery connection with the Shanghai Gold Exchange.
Stephen Law Cheuk-kin, president of the Hong Kong Institute of Certified Public Accountants, stated that Hong Kong's unique value lies in its role as a "superconnector and super value-adder" between mainland China's gold market and international bullion markets. The rapidly shifting geopolitical landscape has heightened demand for gold as a hedge against uncertainty, with central banks worldwide increasing their gold holdings.
In the second quarter of 2026, net purchases reached an all-time high of 289 tonnes, a 34% increase from the previous year. As tensions between the US, Russia, and Iran continue, gold has emerged as an attractive asset for its diversification benefits and reduced vulnerability to sanctions. China's central bank significantly bolstered its gold reserves, adding 640,000 ounces in July, leading to the 21st consecutive monthly purchase.
Hong Kong's gold ambitions have gained traction as Asian economies become major gold consumers, and central banks bolster institutional support. The city's status as an international financial hub, with robust infrastructure and legal protections, has further fueled its push. The newly established gold clearing system in Hong Kong, operated by the government-owned Hong Kong Precious Metals Central Clearing, has attracted 11 Chinese and international banks.
Plans are underway to expand participation, and the Hong Kong Exchanges and Clearing (HKEX) recently relaunched its US dollar gold futures contract, bolstered by reduced trading fees. Physical gold delivery in Hong Kong is facilitated through the Shanghai Gold Exchange, which has launched its first offshore certified vault in the city. This partnership strengthens the link between mainland China and international bullion markets.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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