FSDC Chairman Sees Hong Kong Gold Clearing System as Major Opportunity

The launch of a gold trading and clearing system in Hong Kong presents significant opportunities for the city, according to Benjamin Hung, chairman of the Financial Services Development Council (FSDC). The SAR began trial operations of the centralised gold clearing and settlement system last week, a key step toward becoming a major bullion trading hub, RTHK reported.

Speaking at a press briefing on Wednesday, Hung noted that while the world's largest consumers and buyers of commodities are in the Greater China region, Asia has never had a "powerful commodity trading centre." He said the new gold clearing system could help Hong Kong claim that position. "Gold [trading] is just the initial stage, and if we can conduct it successfully, it'll be very natural for us to expand the ecosystem for gold [to one that covers more commodities]," Hung said. He also raised the possibility of a future multi-currency pricing system for global commodities, which is currently conducted in US dollars, adding that while it is a long-term issue, the opportunity is "definitely here."

Echoing Hung, FSDC board member and UBS Global Wealth Management Asia Chairwoman Amy Lo said Hong Kong can develop into a regional gold storage centre. She noted that central banks and family offices have increased their asset allocation toward gold, creating demand for storage, trading, and hedging. "I believe in Hong Kong, we also have an advantage especially in terms of storage," Lo said. She also expressed confidence in the city's wealth management outlook, noting that the scale of wealth managed in Hong Kong has risen 20% year on year, with more wealth management companies expanding in the territory.