Hong Kong has rolled out fresh steps to build an international gold hub while supporting yuan internationalisation, including plans for a yuan-denominated gold futures contract. Trial operations have begun for a government-owned gold clearing and settlement system designed to mirror infrastructure used by the LBMA in London, alongside an over-the-counter settlement offering and the introduction of a new gold price ticker, HAU. HKEX said on Wednesday, 24 September, it intends to launch the yuan gold futures contract early next year, after reactivating a US dollar gold contract. The initiative sits within a five-year financial plan that also includes expanding yuan settlement for payments linked to mainland Chinese services and creating a mechanism to spend renminbi receipts without converting them into Hong Kong dollars.<\/p>\n
Policy changes extend to taxation and reserves. The government plans to cut the profits tax rate for qualifying commodity traders from 16.5% to 8.25% by 2027, while the Exchange Fund will increase its gold holdings. Officials said metal storage in Hong Kong\u2019s London Metal Exchange warehouse network has exceeded 30,000 tonnes, largely copper and zinc, and they aim to lift local gold vaulting from 200 tonnes to 2,000 tonnes over the next three years. In trade flows, 107 tonnes of gold entered Hong Kong in July versus 72.16 tonnes in February. Globally, gold coin and bar demand reached a 12-year high of 1,374.1 tonnes in 2025, valued at $154bn, with more than half coming from China and India.<\/p>\n
We suggest derivative traders closely watch the mounting liquidity shift from Western hubs like London to Hong Kong over the coming weeks. With gold prices consistently trading at historic highs above $2,600 per ounce in late 2026, the introduction of Hong Kong’s new “HAU” price ticker provides an immediate benchmark to track. Traders should prepare for near-term price discrepancies and arbitrage opportunities between the LBMA and this emerging Eastern hub.<\/p>\n
We must also anticipate increased volatility in offshore yuan (CNH) currency pairs as Hong Kong expands yuan-denominated settlements. Given that the yuan’s share in global payments has steadily climbed to record highs of nearly 5% according to recent SWIFT data, the upcoming yuan-denominated gold futures contract will likely accelerate this trend. Derivative traders should use the coming weeks to establish robust hedging strategies against yuan-dollar fluctuations.<\/p>\n
As physical gold flows rapidly into Hong Kong\u2014highlighted by the massive jump to 107 tonnes entering the region in July\u2014we expect regional price premiums to fluctuate. Historically, strong Asian demand has driven Shanghai gold premiums as high as $40 to $100 per ounce over London prices during peak periods. Traders should position themselves now to exploit these widening arbitrage windows between USD-denominated contracts and the upcoming Eastern contracts.<\/p>\n
We recommend adjusting long-term trading models today to account for Hong Kong\u2019s planned halving of the profits tax rate to 8.25% for commodity traders. The government\u2019s aggressive push to expand its gold vaulting capacity tenfold to 2,000 tonnes will structurally alter physical delivery dynamics in the region. Positioning portfolios ahead of these changes will allow traders to capture early-mover advantages before the global market fully prices in this Eastern shift.<\/p>\n\n\n\n