Hong Kong is considering using the Exchange Fund to buy more gold and participate in local spot and futures markets, as part of a plan to make the city a larger trading centre for the precious metal. Chief Executive John Lee said the Hong Kong Monetary Authority was studying a moderate increase in the fund’s holdings.
The proposal concerns a fund that totalled HK$134.7 billion in the first six months of 2026. It serves as Hong Kong’s de facto sovereign wealth fund and as a reserve used to defend the Hong Kong dollar’s peg to the US dollar. Lee said diversification was a necessary consideration and that gold might be a relatively safe investment, while stressing that the decision would be a matter of professional judgement.
The HKMA is also considering gradually moving its physical gold into designated vaults appointed by the government-owned Hong Kong Precious Metals Central Clearing Company. The company launched a trial gold-clearing and settlement system in early July, and Lee said it would begin official operations in the first quarter of next year.
A greater range of gold exchange-traded funds could be made available to Mandatory Provident Fund investors, while the government plans to encourage a gold-industry association and hold a flagship gold event next year. A dedicated hotline is also planned to provide one-stop support for mainland overseas gold traders.
The gold push sits inside a broader commodities strategy. More than 20,000 tonnes of metals are stored in designated warehouses in Hong Kong, covering over 60,000 square metres. The London Metal Exchange included the city in its global warehousing network last year and has approved 15 local facilities for metals including copper, tin and zinc.
Lee said the government would introduce a half-rate tax concession for commodity trading, study further tax concessions for gold and commodities, and encourage more accredited warehouses. A consultation is planned next year. Separately, the city’s bourse operator is expected to launch a pilot for tokenised warehouse-receipt financing, while the International Organisation for Mediation may explore a specialist mediation panel for commodity trading.