Hong Kong eyeing gold expansion and Northern Metropolis vaults to cement hub status

The city of Hong Kong is considering expanding its gold holdings to further solidify its position as an international financial hub, according to authorities. Officials have indicated that the development could extend to the Northern Metropolis, a large-scale urban project. Financial Secretary Paul Chan Mo-po stated that while there is no pressure to raise interest rates following a US rate increase, authorities would continue to monitor the situation closely.

The Hong Kong Monetary Authority (HKMA), the city's de facto central bank, is contemplating increasing its exposure to gold, given interest from other central banks and geopolitical concerns. Chan expressed optimism about the potential benefits of holding gold in Hong Kong, including the development of derivative services and connections with other financial centers like Shanghai.

Additionally, plans are underway to establish secure gold vaults in the Northern Metropolis, a megadevelopment area seeking to become a major economic and residential hub. These facilities would complement the existing 1,000-tonne-class warehouse at the Hong Kong International Airport, but would not compete with it as demand for such services greatly exceeds the airport's capacity.

The government has earmarked industry land in the Northern Metropolis to address the demand for commodity warehousing. Furthermore, Hong Kong aims to strengthen its role as the world's largest offshore renminbi trading hub by settling government expenses in yuan in suitable scenarios and issuing more renminbi-denominated bonds.