Hong Kong Sets Sights on Global Gold Hub Status with Yuan-Denominated Futures Contract

Hong Kong is taking steps to establish itself as an international gold hub by launching various initiatives. The city's government-owned clearing system, which mirrors that of the London Bullion Market Association (LBMA), will offer a range of services for gold transactions, including deposits, withdrawals, and over-the-counter settlements. A new gold price ticker, HAU, has been introduced to make Hong Kong gold prices accessible to global market participants.

Building on this momentum, Hong Kong Exchanges and Clearing (HKEX) announced plans to launch a yuan-denominated gold futures contract in early 2024. This move aims to advance two key priorities outlined in the city's five-year plan: promoting yuan internationalization and developing Hong Kong's gold market.

The government is also implementing measures to encourage the use of the yuan as a working payment currency in Hong Kong, including tax reforms that will slash the profits tax rate for qualifying commodity traders from 16.5 percent to 8.25 percent by 2027. The city's Exchange Fund will increase its gold portfolio, and local gold vaulting is expected to rise from 200 tonnes to 2,000 tonnes over the next three years.