To further accelerate the development of the entire industry chain, Hong Kong will continue its efforts to build an international gold trading center in 2026 in various aspects, including clearing, refining, enriching investment tools, and establishing exchange platforms.
Article author: Jiao Jian
Article source: Caijing Magazine
After nearly two years of planning and implementation, with a series of industrial foundations being solidified, the development of Hong Kong's ecosystem in gold and other precious metals and commodities is expected to enter a period of acceleration in 2026.
The newly established "Commodities Strategy Committee" of the Hong Kong Special Administrative Region (HKSAR) government recently held its first meeting, revealing a series of information. The committee was proposed by HKSAR Chief Executive John Lee in his 2025 Policy Address, and its chairman is Financial Secretary Paul Chan. In addition to hearing on global commodity market trends and Hong Kong's future development potential, the meeting also defined key areas of focus.
“Over the past year or two, Hong Kong has been actively building a more vibrant commodities ecosystem. From joining the London Metal Exchange’s global warehouse network to facilitate physical metal delivery activities, to accelerating the establishment of an international gold trading market, solid steps have been taken. Hong Kong will formulate and implement a comprehensive commodities development strategy through high-level planning and coordination,” said Paul Chan.
For example, in terms of warehousing and logistics, in January 2025, the London Metal Exchange (LME), a subsidiary of the Hong Kong Stock Exchange, included Hong Kong as a licensed delivery location within its global warehouse network. As of the end of November 2025, the LME had more than ten approved and operational warehouses in Hong Kong, storing approximately 17,000 tons of non-ferrous metals.
Regarding gold storage and logistics, the Hong Kong Airport Authority has completed the first phase of expansion of the airport's precious metals storage facility, bringing its capacity to 200 tons, and is actively implementing plans to further expand it to 1,000 tons. To accelerate the establishment of an international gold trading market, Hong Kong aims to expand its gold storage capacity to over 2,000 tons within three years.
Regarding the delivery of gold and other precious metals, the Shanghai Gold Exchange launched its first offshore gold delivery warehouse in Hong Kong on June 26, 2025, and simultaneously listed gold contracts for delivery in Hong Kong on its international board.
This move is considered a key step in the internationalization of China's gold market, as it not only expands the global reach of RMB-denominated gold trading (with a model of "RMB-denominated trading and overseas physical delivery"), but also deepens Hong Kong's role in the regional market. It can build a complete RMB gold investment channel for international investors, fully covering the entire process of buying, selling, holding, and physical exchange.
With the implementation of a series of related measures, coupled with the continuous expansion of the business network of the Hong Kong Gold Exchange, which officially began operations in early 2025, the industry believes that the Hong Kong gold market's full-industry chain layout has been initially formed, and the next phase of related work will continue in 2026.
One of the key priorities is the establishment of a central gold clearing system in Hong Kong. This system will be managed by a wholly-owned company of the Hong Kong SAR government and is scheduled to begin trial operations in 2026. To further expand its influence, the system will also invite the Shanghai Gold Exchange to participate.
An industry insider in Hong Kong explained to Caijing that one of the purposes of establishing a central gold clearing system in Hong Kong is to provide efficient and reliable clearing services for internationally standardized gold transactions. Inviting the Shanghai Gold Exchange to participate is to prepare for further interconnectivity with the mainland Chinese market in the future.
This clearing system will work in conjunction with a gold industry-related organization, also expected to be established in 2026. To strengthen this work, the Hong Kong SAR Government will also establish a preparatory group to promote industry collaboration by broadly engaging stakeholders from Hong Kong and abroad.
Overall, Hong Kong's efforts to build a global gold trading hub will focus on five areas: warehousing, refining, clearing, enriching gold investment tools, and establishing a platform for communication with the government and regulatory agencies.
According to statements made by Christopher Hui, Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, at a recent briefing on the development of the gold market and other occasions, these mechanisms will "further develop Hong Kong into an international gold trading center, and promote Hong Kong to better serve national development by improving financial governance and enhancing its international voice in gold pricing."
"To become a successful international gold trading center, securing pricing power for gold is naturally a crucial condition. Failure to do so would weaken Hong Kong's status and credibility as an international gold trading center," a vice chairman of the Hong Kong Gold Exchange previously told Caixin.
The so-called further development stems from Hong Kong's status as a crucial gold trading hub in Asia and globally during the 1970s. Its advantages in the free flow of capital and goods were seen as effectively filling the trading gap between the London and New York gold markets, enabling near 24-hour continuous operation of the global gold market. However, in the following decades, due to various factors, some of Hong Kong's gold trading business was transferred to Singapore and Dubai.
To further leverage Hong Kong's stability, security, and internationalization to seize golden opportunities, a recent research report titled "Unleashing Hong Kong's Potential: Expanding the Growth Prospects of the Commodity Market" points out that the Hong Kong Financial Services Development Council also notes that further expansion of the commodity market would not only enhance economic resilience but also solidify Hong Kong's position as an international financial center in an increasingly complex and interconnected landscape.
To effectively support Hong Kong's development into an international gold trading center, in addition to the aforementioned cooperation with Shanghai, Shenzhen, separated from Hong Kong only by a river, is also accelerating its industrial cooperation with Hong Kong. At the recent Shenzhen Gold Expo, a senior official from the Shenzhen Municipal Financial Regulatory Bureau stated that the Shenzhen and Hong Kong governments will launch cooperation in the gold sector to help Hong Kong establish itself as an international gold trading center. According to a memorandum of understanding recently signed between the two cities, Shenzhen and Hong Kong will support Hong Kong gold traders in conducting processing trade cooperation with qualified Shenzhen refining enterprises in accordance with laws and regulations.
The source also revealed a series of possible specific development directions, namely, the two sides will jointly build a gold refining industry collaborative base, support Hong Kong gold merchants with specific qualifications to carry out processing trade with Shenzhen refining enterprises with London Bullion Market Association (LBMA) qualifications, leverage Shenzhen's advantages in gold and jewelry processing and manufacturing and industrial chain, strengthen cooperation between Shenzhen and Hong Kong in the fields of physical gold processing, trading and delivery, and increase the trading volume of the Shenzhen and Hong Kong gold markets; jointly establish a Shenzhen-Hong Kong gold trade promotion delegation, organize gold enterprises from both places to participate in international precious metal exhibitions, and promote physical gold products and services in the Middle East, ASEAN and other regions.
“Gold is a special commodity, and its export requires a special license. Shenzhen has many high-quality gold smelting services. For example, gold from overseas can be directly imported into Shenzhen via Hong Kong for smelting, and then exported from Shenzhen, thus forming a ‘two-ends-outside’ model. Currently, the two places are implementing relevant arrangements.” Xu Zhengyu recently revealed that with the proposal of the “Hong Kong import - Shenzhen smelting - re-export overseas” linkage model, some companies have already explored the feasibility of setting up refineries in Hong Kong.
The considerations behind this move are believed to be related to Hong Kong's policy of expanding gold trading, namely, encouraging gold merchants to establish or expand refineries in Hong Kong, process raw materials in mainland China, and then export the refined gold back to Hong Kong for trading and delivery purposes. To facilitate the return of processed materials from mainland China to Hong Kong, Hong Kong will also study tax incentives.
In addition to these measures that have already been implemented or announced, the industry is also paying close attention to what new initiatives Hong Kong, which aims to become an international gold trading center, will take in 2026, including expanding related financial services such as insurance and testing and certification, as well as expanding derivative transactions such as mortgages, loans, and hedging.
