Hong Kong is accelerating the improvement of its "clearing-settlement-storage" chain for gold trading. On January 26, the Financial Services and the Treasury Bureau (FSTB) of Hong Kong stated that the gold central clearing system, fully owned by the government, would commence trial operations this year. Additionally, during the Asian Financial Forum, a cooperation agreement with the Shanghai Gold Exchange was signed to strengthen the connectivity between the gold markets of the two regions.
Clearing System Implementation: Led by State-Owned Platform, with Shanghai Gold Exchange Involved in Governance
According to the Hong Kong government's announcement, a new gold central clearing system will be established and operated by the Hong Kong Precious Metals Central Clearing Limited (wholly government-owned). The board will be chaired by the Secretary for Financial Services and the Treasury, with representatives from the Shanghai Gold Exchange participating as vice-chairman to engage in rule-making, institutional access, system design, and risk management, aiming to align with international standards.
Support Measures: Storage Expansion, Tax Benefits, and Product Innovation Advancing in Parallel
The government-revealed support roadmap includes:
- Storage Capacity: Supporting the Hong Kong Airport Authority and financial institutions in the construction of gold storage facilities, aiming to exceed 2,000 tonnes of storage capacity within three years, and advance the airport storage expansion to "thousand-tonne level".
- Tax Policy: Proposing legislative suggestions in the first half of this year to include precious metals in the qualified investment range for preferential tax treatments for funds and single-family offices.
- Market Products: A "gold fund" will be listed in Hong Kong this week, focusing on physical gold trading and storage based on local infrastructure, and will offer a bank physical gold redemption option; the issuer also plans to explore non-listed categories distributed through licensed digital asset trading platforms.
Additionally, the Hong Kong government mentioned establishing groundwork for cooperation with Shenzhen in processing trade, aiming to enhance regional supply chain and service capabilities.
Market Background: Gold Price Surges Above $5,100, Led by Safe-Haven Buying
These advancements occur amid a surge in gold prices. According to Reuters, on January 26, spot gold hit a historical high of $5,110.50 per ounce, mainly driven by safe-haven demand triggered by geopolitical tensions and market volatility, coupled with factors such as a weakening U.S. dollar.
Points of Interest: System Details and Expansion of Participants
The market's subsequent focus will be on three key aspects: the timeline and scope of participating institutions for the trial operation of the clearing system, the pace of implementation of the tax and regulatory arrangements, and whether the expansion of storage and delivery infrastructure can lead to higher market liquidity and pricing influence.
