Singapore delays plans for gold contract

SINGAPORE — Singapore has been forced to delay its plans for an exchange-traded gold contract because of technical issues, sources said yesterday, adding a dent to its ambitions of becoming South-east Asia’s gold trading hub.

At the same time, rival China will launch its international gold exchange 11 days ahead of schedule, racing ahead in the scramble to set up an Asian bullion benchmark.

Asia, home to the world’s top two gold buyers, China and India, has been clamouring to gain pricing power over the metal and challenge the dominance of London and New York in trading. The state-run Shanghai Gold Exchange (SGE) will launch the global gold bourse in the Shanghai free-trade zone tomorrow, Reuters cited unidentified sources as saying. The SGE had initially planned the launch for Sept 29. The change was made based on the availability of some government officials to participate in the launch event, one source said, adding that all 11 physical gold contracts will begin trading tomorrow.

Meanwhile, Singapore has delayed the launch of the world’s first exchange-traded wholesale kilobar gold contract to next month, two sources said. The contract, for 25kg of 99.99 per cent purity, was scheduled to start as soon as this month, the SGX, the World Gold Council, IE Singapore and the Singapore Bullion Market Association said in June. The delay was due to some technical issues in setting up the trading system, the sources said yesterday.

The Singapore Exchange could not be reached for comment.

Singapore has been seeking to make the country a precious-metals trading hub. In 2012, it scrapped the 7 per cent goods and services tax for investment-grade gold and has since seen many banks open up gold vaults here. After the change, the trade in gold in Singapore rose 94 per cent to S$35 billion last year from a year earlier. Agencies