Hong Kong plans to use Exchange Fund for gold purchases to boost trading hub ambitions

Chief Executive John Lee outlined a plan to turn Hong Kong into a global gold trading centre by potentially tapping the HK$134.7 billion Exchange Fund for additional gold purchases. The Hong Kong Monetary Authority is assessing larger gold positions and participation in spot and futures markets, while also preparing to transfer existing physical gold to vaults designated by the Hong Kong Precious Metals Central Clearing Company Limited, which will begin official clearing and settlement operations in the first quarter of next year.

A dedicated hotline will be set up to assist mainland and overseas gold traders, and the Mandatory Provident Fund Schemes Authority may broaden MPF investment options to include more gold ETFs. Lee highlighted Hong Kong’s extensive metal storage capacity and recent inclusion in the London Metal Exchange’s warehousing network, and announced upcoming tax concessions, including a half-rate rate for commodity trading and studies on further gold-specific relief. He also mentioned future projects such as tokenised warehouse-receipt financing and a possible IOMed-led mediation panel for commodity disputes.