Hong Kong Launches Gold Clearing with London Trading Banks and Standards

GOLD and SILVER TRADING in London saw prices struggle to recover an overnight drop made during Asian hours as the financial authorities in Hong Kong announced a test run of the Chinese city's new government-owned gold clearing and settlement system.

With gold for London settlement losing as much as 2.0% from yesterday's 2-week high of $4200 per troy, the news trumps nearby Singapore's push to launch gold clearing in Asia.

Gold trading in London today saw the price rally to $4150 as silver regained $1 of the $3 lost from Monday's 2-week high above $63 per troy ounce.

"The commencement of the trial operation of Hong Kong's new central clearing and settlement system for gold, together with a suite of targeted initiatives...will collectively bolster Hong Kong's role as a trusted international gold trading, clearing, and reserve hub," said the Special Administrative Region's Financial Services and Treasury Bureau (FSTB) today.

Of the 11 banks joining the Hong Kong project, only 1 is not an existing member of the London Bullion Market Association, and 5 are divisions or subsidiaries of the five London clearing banks, including the Hong Kong branch of US financial giant Citi, which was yesterday accepted as a member of London Precious Metals Clearing Limited.

Latest data says that the average daily value of gold and silver bullion cleared through London edged higher in May from April's 4-month low to $84.2 billion.

Nearly 50% greater than May last year, that value was down by 1/5th from January's new all-time high above $112bn. Thanks to the past year's steep price rise, the number of ounces transferred was barely changed year-on-year in gold and 22.2% smaller in silver from May 2025.

With silver running at 17.1% of May's average daily total − down from January's near-15-year high of 23.5% − overall gold volumes reported by all trading members of the LBMA edged up to more than $216bn per day according to data compiled and published by the mining industry's World Gold Council.

That ratio of 2.9 over gold clearing volumes was in line with 2025's average figure of 2.8x, contrasting with the level of 1.6x revealed to much surprise in 2018 when the LBMA's then-new Trade Data project showed that total gold trading volumes through the London bullion market were half the size or less commonly guessed by analysts in the absence of reliable figures.

Alongside Monday's news of Citi joining the LPMCL to clear gold in London, trade association the LBMA yesterday announced that Citi has also become an approved weigher of bullion bars for the London market following a "successful assessment" of its procedures.

While the LBMA does not approve storage vaults, that pending addition of either 'trader' member CitiGroup Global Markets Ltd or 'bank' member Citibank NA to the list of Approved Weighers means Citi most likely operates its own facilities in London, rather than simply planning "to use a vault [by] partnering with" independent non-bank secure logistics specialists Malca-Amit as previously rumored in the media.

That's because all of the current Approved Weighers − the Bank of England, plus Malca's commercial vault competitors Loomis and Brink's, as well as Citi's now-fellow clearing banks J.P.Morgan, HSBC and ICBC Standard − each owns and operates its own facilities, whereas London bullion clearing bank UBS, which dominates the Swiss market, does not and is not included in the list.

While the Hong Kong market − like China's neighboring Shanghai Gold Exchange and also Singapore − trades 1-kilo bars of gold, the city's new Clearing Rulebook says that "Eligible gold for settlement comprises approximately 400 fine troy ounce bars meeting international standards."

That almost certainly means the London Good Delivery standards and therefore Good Delivery list of refiners created and maintained by the LBMA for gold acceptable to the world's premier bullion market.