Key Takeaways:
Standard Chartered is studying a gold vault in Hong Kong and projecting gold prices could rise about 20% this year.
Gold could reach $5,150 an ounce by year-end, Standard Chartered said, as the bank studies establishing its first physical gold storage vault in Hong Kong.
"Demand for gold and other precious metals is projected to remain elevated in the coming years," John Thang, head of markets for Hong Kong, Greater China and North Asia at Standard Chartered, said.
The bank forecasts gold at $4,650 an ounce in the second quarter, $4,850 in the third and $5,150 in the fourth, implying about 20% upside. Standard Chartered shares rose 2.7% on Friday, with short selling accounting for 8.9% of turnover.
If realized, the Hong Kong vault would be Standard Chartered's first physical gold storage facility, complementing its existing physical gold and derivatives trading services for institutional clients and strengthening its precious metals ecosystem.
Gold Hub Competition Intensifies
The vault study comes as Asian financial centers compete for gold business. Singapore last month said it will establish an over-the-counter gold clearing system for Loco Singapore by year-end and introduce central bank gold-vaulting services by October, with six banks including DBS, Deutsche Bank and J.P. Morgan as clearing members. The Monetary Authority of Singapore will also remove a 5% cap on physical investment precious metals under tax-incentive schemes for eligible funds and family offices.
Hong Kong Exchanges & Clearing is exploring a relaunch of gold futures, according to a Reuters report in May, as the city pushes to become an international gold trading and storage hub. DBS, Singapore's largest bank, last week said it will offer tokenized physical gold to retail customers, while OCBC lets institutional and private banking clients buy, sell and store physical gold in Singapore.
Standard Chartered's move would position it to capture growing institutional demand for gold storage and trading in Asia during Asian trading hours, when a significant portion of global gold flows now originate. The bank's price forecast of $5,150 an ounce by the fourth quarter implies continued momentum for gold as a reserve asset, with central banks and sovereign entities seeking secure storage options in the region.
This article is for informational purposes only and does not constitute investment advice.
