Hong Kong targets gold clearing system launch in July, Bloomberg says

Hong Kong plans to launch the new central clearing system for gold in July as part of its push to make the city a bullion trading hub, Bloomberg reported. 

The government-owned system will mirror the financial infrastructure of London, the world's largest precious metals market, and will allow participants to settle trades through "unallocated accounts, the report said, citing sources.

Such accounts are crucial for market liquidity as they enable faster and larger-scale transactions, said the report. 

Instead of holding specific serialized gold bars, clients hold a claim to a specific quantity of gold with the clearing entity, it said, adding that the mechanism is currently used to settle the vast majority of precious metals traded in London.

The arrangement has generated immense interest in the industry, particularly among trading companies and financial institutions looking for alternative trading options in Asia, the news agency said.

The report also notes that Hong Kong has invited several central banks with friendly ties to China to participate in the system.

In addition to the Shanghai Gold Exchange, regulatory bodies, 11 lenders, including six international banks, are board members of the Hong Kong Precious Metals Central Clearing Company, responsible for the clearing system, the government announced last month.

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