SUMMARY: Research paper: Golden opportunity? Hong Kong as an Asian Gold Pricing Centre

By HKEX

As a global financial centre located at the gateway of the world’s second largest economy and the biggest gold consumer – China – Hong Kong has the right ingredients to become an Asian gold pricing centre.

The report examines the significance of gold trading in the world from the uses, supply and demand, historical pricing, and main players in the gold value chain. By further examining the global gold markets the report highlights the golden opportunity for Hong Kong to become an Asian Gold Pricing Centre in the light of the fundamental market demand for gold trading in China together with the trading demand from the rest of the world and the demand in related risk management. 

In order for Hong Kong to cultivate a new gold pricing benchmark, it is necessary to form a well-functioning marketplace to link up the spot market and the futures market and to provide efficient channels to serve these markets in Hong Kong, and to complete the gold ecosystem to include other gold-related financial products and services. 

Given Hong Kong’s advantages as a free market and an entrepôt trade centre, Hong Kong has an active physical gold trading market and enjoys the status as one of the major bullion markets in the world. The introduction of physically delivered gold futures in Hong Kong would be a stepping stone to achieving this objective.