Key Takeaways
- The demand for gold has skyrocketed in recent years and is increasingly being driven by central bank accumulation of gold reserves, which has grown 3.4x since 2020.
- Emerging market central banks remain significantly underweight in gold relative to their developed market peers, indicating sustained long-term demand growth. Moreover, ongoing geopolitical tensions are prompting central banks and broader market participants to diversify away from established gold centres such as the United States and the Middle East.
- Hong Kong, as a key APAC financial centre, is well-positioned to capture a growing share of this activity across the gold value chain, supported by a range of policy initiatives:
- Refining: Hong Kong has outlined concrete policy support to attract gold refiners, including site selection assistance, accreditation support, and financial incentives. Early market entrants, including MKS PAMP and Point Gold International, signal growing industry confidence. Regulatory compliance, environmental requirements, and talent availability remain key considerations for prospective operators.
- Vaulting: Hong Kong has set a target of 2,000 tonnes of gold vault capacity, equivalent to approximately 40% of 2025 global annual demand. Achieving meaningful utilisation will require more than physical infrastructure. Sustained engagement from central banks and institutional investors, alongside deep clearing and liquidity ecosystems, will be critical to avoid the underutilisation challenges observed in comparable initiatives elsewhere.
- Clearing: Hong Kong's spot gold turnover has grown fivefold over the past nine years, yet its gold derivatives market remains underdeveloped relative to COMEX and LBMA. A recently signed MoU with the Shanghai Gold Exchange marks a significant step towards establishing a central clearing system. The growing tokenised gold segment in Hong Kong, led locally by HSBC Gold Token and HashKey, presents an additional avenue for market development within a regulated framework.
- Products & Services: Gold allocation among Hong Kong wealth management clients doubled from 4% to 11% between 2024 and 2025, reflecting a meaningful shift in investor behaviour. Hong Kong's tax advantage on physical gold purchases provides a structural edge in retail distribution, particularly relative to the mainland market. However, gaps still remain in the product offering, with tokenised gold representing an underpenetrated opportunity with significant growth potential.
