Hong Kong Gold Exchange: Advancing an International Gold Settlement System

The 2025 Policy Address outlines ongoing efforts to develop Hong Kong as a regional gold reserve hub. Haywood Cheung, Chairman of the Hong Kong Gold Exchange (HKGX), welcomed the initiative, expressing strong support for the proposed framework. Industry stakeholders are equally optimistic, confident that government-backed efforts to establish an international gold settlement system will safeguard buyers and sellers while promoting the global acceptance of gold as a trusted asset.

Haywood Cheung, Chairman of the Hong Kong Gold Exchange (HKGX), highlighted that Hong Kong’s gold trading volume has consistently ranked among the top four globally over the past decade, based on industry data. However, a significant portion of these transactions occurs over-the-counter (OTC), often lacking robust safeguards. To address this, the Hong Kong authorities aim to integrate OTC transactions into HKGX’s international gold settlement system. Industry stakeholders support this initiative, noting that the government’s clearing platform, combined with HKGX’s advanced trading and storage facilities, will create a comprehensive and secure gold ecosystem.

Cheung emphasized that mainland China’s increasing openness to the gold market in recent years, facilitated by Hong Kong’s status as a free trade port, has strengthened financial connectivity between the two regions. He expressed confidence in the future of Hong Kong’s precious metals market, particularly with initiatives like cross-border yuan-gold settlements.

The 2025 Policy Address outlined plans to expand Hong Kong’s gold storage capacity to exceed 2,000 tons within three years. Given Hong Kong’s current annual physical gold deliveries of approximately 500 to 800 tons, and the anticipated inclusion of OTC transactions in the settlement system, Cheung believes a 2,000-ton storage facility is well-suited to meet future demand. Additionally, HKGX will actively participate in establishing a gold industry association to foster broader collaboration among stakeholders.

Regarding gold prices, Cheung noted that gold investment products have been overlooked for over a decade, even during prolonged booms in bond and stock markets. However, with ongoing geopolitical tensions and global interest rate cuts, he views current international gold prices as reasonable, signaling the start of a bull market. He predicts that gold prices could challenge US$4,000 per ounce in 2025.

Source: Oriental Daily

Translation from artificial intelligence