Why is Singapore building the gold hub that India wanted?

**SPEAKER_1** (0:00)
Hello folks, you're tuned in to Finshots Daily. In today's episode, we look at why and how the center of gravity in the global gold market is shifting.
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Now, back to the story.
India loves gold. We buy it during weddings, festivals and pretty much every major life event. In fact, Indian households collectively hold an estimated 25,000 tons of gold, which is actually more than the official reserves held by most central banks. But here's the strange part. Even though India is one of the world's biggest consumers of gold, it plays only a small role in the business of trading, storing, financing and moving gold around the world. And that's exactly where Singapore sees an opportunity.
For context, recently Singapore unveiled plans to launch a new gold clearing and settlement system along with specialized vaulting services for central banks. The goal is seemingly simple. Make Singapore the undisputed hub for storing, trading and settling gold in Asia. But hey, if India sits at the center of global gold demand, why is Singapore positioning itself to become Asia's gold hub? You ask? To understand that, you have to start by looking at how the gold ecosystem operates. It works in four distinct layers. Number one, mining and refining. Number two, trading and price discovery. Number three, storage and clearing. And finally, number four, consumption. Of these four layers, India dominates only the last as you've seen. But to be fair, there isn't a single global gold market. Gold trading is spread across multiple financial centers, each specializing in a different part of the ecosystem. London dominates wholesale bullion trading and clearing. New York is the center for gold futures and derivatives through COMEX, which is the commodity exchange. Shanghai has become Asia's most important hub for physical gold trading and price discovery. Switzerland handles much of the world's refining and storage, while Dubai has emerged as an important bridge connecting bullion flows between Asia, Africa, and Europe. And India did try to change that. In 2022, it launched the IIBX, that is the India International Bullion Exchange, in Gift City. The vision was ambitious. Instead of importing gold through traditional channels, India wanted buyers to source gold through a domestic exchange. Over time, policymakers hoped this would deepen liquidity, improve price discovery, and eventually help India become an important center for bullion trade. And at first glance, things seemed to be moving in the right direction. Gold traded on IIBX jumped from just 411 kilos in FI23 to over 92 tons in FI25. That is roughly a 227x jump in just 2 years. By March 2025, more than 100 tons of gold had been imported through the exchange. Those are impressive numbers for a platform that's only a few years old. But there's a catch, because building a successful exchange and building a successful gold hub are two very different things. Just think about London. For centuries, London has been the undisputed king of the global gold trade. If a central bank wants to buy a billion or financial institution needs to move billions of dollars worth of the yellow metal, London is the one pulling the strings. And that's not just because it has the world's largest gold exchange, but also because it built an ecosystem. To put things in perspective, behind London's gold market sits an ecosystem known as Local London, which is a vast network of vaults, bullion banks, clearing houses, insurers, refiners, and logistics providers. It is supported by globally trusted standards, such as the LBMA Good Delivery Framework, which allows gold bars to move seamlessly between institutions without constant re-verification. The infrastructure took decades to develop, and that's also why central banks store gold there, and why traders across the world continue to reference London prices. And that's what Singapore seems to have taken note of.
Instead of trying to build another trading venue, it's focusing on the plumbing that sits behind the gold market, which has vaults, clearing systems, custody services, and settlement networks. The timing actually makes sense.