Hong Kong and Shanghai are set to sign a memorandum of understanding next week to create a cross-border gold trade clearing system, a move designed to strengthen Hong Kong’s position as a leading international center for gold trading, according to Financial Secretary Paul Chan.
Chan said the agreement is expected to be signed during the 19th Asian Financial Forum, marking an important step toward deeper connectivity and integration between the two markets.
In his weekly blog, Chan noted that authorities are fast-tracking the establishment of a central clearing system as a core element of financial market infrastructure. The initiative aims to improve the reliability and efficiency of gold trading and delivery in Hong Kong, reduce transaction costs, and enhance market liquidity.
Pilot operations for the new system are scheduled to begin later this year, with the Shanghai Gold Exchange invited to take part in the trial phase.
The move comes amid growing global investor interest in gold, driven by heightened geopolitical tensions and a gradual shift away from U.S. dollar-denominated assets. Gold prices surged by more than 60% in 2025, marking the strongest annual performance since 1979, while global gold demand reached $146 billion in the third quarter, representing a 44% year-on-year increase, Chan said.
The proposed cross-border clearing framework is intended to streamline gold trading flows and reinforce Hong Kong’s ambition to emerge as one of the world’s premier hubs for precious metals.
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