Six Banks, Including DBS, Prepare Singapore Gold Clearing System Set for 2027 Launch
Key Facts
Singapore Exchange Group and six founding banks, including DBS, are preparing to launch an over-the-counter gold trading clearing system after industry testing was completed, according to a Monetary Authority of Singapore statement dated November 10. The group also includes Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC and UOB. Live trading and market operations are scheduled to begin in the first quarter of 2027, with liquidity expected to build over the year. The authority said the initiatives mark progress in Singapore’s efforts to develop a trusted and efficient gold trading hub serving the Asia-Pacific region. The timeline puts the system in its preparation phase ahead of operations, while its rules are expected to be finalized soon.
The clearing system aims to support standardized settlement during Asian trading hours in a market where gold trading and price discovery are currently concentrated in global centers such as New York and London, the Business Times reported. The Monetary Authority describes the “Singapore loco” market as a system in which trades are priced, cleared and settled against gold physically stored in Singapore. The authority’s plan in March specified two types of bars for the system: large bars weighing 400 troy ounces, or about 12.4 kilograms, and 1-kilogram bars. Large bars are the preferred institutional standard in London, while the kilogram standard is common in Asian markets, according to the authority. The system is designed to bring together bar sizes used in Western and Asian institutional trading within a settlement infrastructure operating during regional hours.
The project comes as liquidity and price discovery remain concentrated in London and New York, despite Asia’s significant weight in demand for the metal. Deputy Prime Minister Gan Kim Yong said in June that Asia accounts for about 70% of annual consumer demand for gold, while trading, liquidity and price discovery are concentrated in established global centers. He added that the proposed system would “simplify trade processing, enhance transparency and support more efficient clearing and settlement,” giving participants greater confidence in executing transactions in Singapore. DBS said in a survey published on November 10 that global gold demand exceeded 5,000 tonnes in 2025, with its value reaching a record $555 billion. The survey added that Asia accounted for more than half of investment in gold bars and coins and demand for jewelry during the same year.
The clearing system accompanies other initiatives to build physical gold infrastructure in Singapore. The Monetary Authority has launched a service to hold gold for foreign central banks, international financial institutions and sovereign entities in national currency vaults, which can accommodate up to 500 tonnes and be expanded if demand rises. The authority will also offer gold custody accounts to a selected group of bullion banks based in Singapore, including institutions with expertise in gold services and providing liquidity to institutions. DBS said in September that it expanded its vault space in 2026 to meet rising demand from wealth management clients and institutional entities. In its September survey, about half of participating asset managers and banks said state-backed gold infrastructure had increased their institutions’ interest in Asian hubs, while 25% of participating central banks were considering the region for storing official gold reserves.
The regulatory plan includes expanding the goods and services tax exemption to cover specified services related to qualifying precious metals when provided between institutional participants covered by the framework. The services include gold vault storage, refining or recasting, assaying and broking, according to the Monetary Authority and the Ministry of Finance. The enhanced tax framework is expected to take effect in April 2027, with further details to be announced in the 2027 Budget. The change is part of a broader package combining clearing, custody and tax services tailored to wholesale transactions. The exemption applies to the services and participants specified in the framework, not to all gold transactions or services.
The next operational milestone is the start of trading and market operations for the clearing system in the first quarter of 2027, with liquidity building over the year, according to the schedule announced by the authority. Singapore Exchange, meanwhile, is targeting the launch of a physically deliverable “Gold Kilobar Futures” contract in the second quarter of 2027. Alongside the announcement of the initiatives, EL7 data showed DBS’s depositary receipt, listed under the symbol DBSDY, closed at 220.25 in the November 9 session; the data did not specify the pricing currency. The figure represents the close of the session before the announcement and does not include share price movement after its release. DBS said that “trusted infrastructure, modern clearing and settlement, and innovation in financial products are reshaping access to gold.”