Hong Kong’s proposed gold exchange along Belt and Road could enhance status as international gold hub

Talks are said to be taking place between the Hong Kong gold exchange and Singapore, Myanmar and Dubai about the establishment of a gold commodity corridor.

The Chinese Gold and Silver Exchange Society (CGSE), Hong Kong’s gold exchange, is hoping to establish a corridor promoting yuan-denominated products under China’s Belt and Road initiative.

The gold commodity corridor would establish an integrated infrastructure network based in Hong Kong.

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A bonded warehouse is proposed in the Qianhai free trade zone near Shenzhen, which will store up to 1,500 tonnes of gold and could provide custodial and physical settlement services. The warehouse would be connected by proposed infrastructure with commercial users and precious metals traders along the Belt and Road.

This proposal was announced by CGSE president Haywood Cheung Tak-hay on Tuesday, as trading opened for the first day in the Year of the Dog.

Cheung stated: “The successful linkages of such a gold corridor would probably boost demand from users and investors for kilobar gold. This may also increase the turnover of yuan-denominated products by 2 or 3 times.”

The proposed warehouse and infrastructure is expected to undergo development within a few months.

According to the South China Morning Post, Joseph Chan Ho-lim, Under Secretary for Financial Services and the Treasury, said developing an industrial chain along the Belt and Road will enhance Hong Kong’s status as an international hub for gold transactions. He stated: “although our economy is in an upward cycle, we need to solidify our advantages and open up new development areas.”

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