Shanghai-Backed Gold Clearing Platform Launches Amid Record Market Surge

Hong Kong’s financial sector entered a new era as the city formalized a partnership with Shanghai to establish a centralized precious metals clearing system, coinciding with gold prices breaching the $5,000-per-ounce threshold for the first time. The collaboration marks a significant step in positioning Hong Kong as a regional hub for gold trading while strengthening China’s footprint in global precious metals markets.

Shanghai Gold Exchange Partners with Hong Kong on Infrastructure Development

Officials from Hong Kong and Shanghai finalized their cooperation framework during the 2026 Asian Financial Forum, establishing the Hong Kong Precious Metals Central Clearing Co. as the cornerstone of this initiative. The entity will operate under international standards for transparency and risk management, with trial operations anticipated to commence in the coming months following regulatory approval.

Christopher Hui, Hong Kong’s Secretary for Financial Services, will chair the new platform, while a representative from Shanghai Gold Exchange will serve as deputy chair. The Shanghai-based institution, operating under the People’s Bank of China, will provide comprehensive technical support, regulatory guidance, and institutional screening. This arrangement reflects a broader strategy to deepen financial ties between Hong Kong and mainland China.

China’s Central Bank Deputy Governor Zou Lan emphasized the broader significance of the arrangement. “This cooperation will help Hong Kong develop into an international gold trading center,” he stated, noting that the infrastructure aligns with Beijing’s initiative to expand offshore digital yuan usage. The clearing platform is designed to streamline gold transactions while maintaining compliance with international standards, reinforcing Hong Kong’s role as a global financial gateway.

Gold Prices Surge to Record Levels Amid Central Bank Accumulation

The precious metals market experienced remarkable momentum throughout 2025, with bullion climbing 60% as central banks—particularly China—accelerated their reserve accumulation strategies. Gold’s ascent to $5,000 per ounce reflects growing geopolitical uncertainties and sustained institutional demand for physical assets.

China has emerged as the world’s dominant force in gold consumption and production, holding 7.7% of global reserves totaling 2,306 metric tons by year-end 2025. The country has maintained consecutive monthly purchases for 14 months, signaling a strategic long-term commitment to physical precious metals. Beijing has additionally announced plans to construct a high-capacity gold vault exceeding 2,000-ton storage capacity within three years, administered through Shanghai Gold Exchange’s warehousing infrastructure. This expansion underscores China’s determination to secure supply chains and strengthen its position in global precious metals pricing and physical distribution networks.

Russia-China Gold Trade Reaches Record Heights Amid Geopolitical Shifts

Trade dynamics in the precious metals sector shifted significantly, with Russia exporting 25.3 tonnes of gold to China during 2025—an 800% year-on-year surge reflecting geopolitical realignment. December shipments peaked at 10 tonnes, valued at approximately $1.35 billion, elevating Russia’s standing to the seventh-largest gold supplier to China.

Switzerland retained its position as China’s primary gold supplier with $25.73 billion in annual exports, followed by Canada at $11.06 billion and South Africa at $9.42 billion. Australia and Kyrgyzstan rounded out the top suppliers with $8.77 billion and $4.95 billion respectively. These bilateral trade flows underscored China’s diversified procurement strategy and strengthened supply resilience amid evolving global supply chains.

Parallel developments in rare earth markets added complexity to trade relations. Chinese rare earth companies posted exceptional profit margins, with 47 firms matching their full-year 2024 earnings by September 2025 alone. Supply restrictions imposed by Beijing—affecting seven rare earths including dysprosium—combined with strong domestic policy support, drove dysprosium prices to €935 per kilogram in European markets by January 2026. The U.S. responded with additional tariffs on Chinese goods, intensifying trade tensions between both nations. Ongoing negotiations seek to resolve these disputes, though impacts on global supply chains remain uncertain as the situation evolves.