Hong Kong eyeing gold expansion and Northern Metropolis vaults to cement hub status

Hong Kong’s plan to raise its gold holdings will further cement the city’s status as an international financial centre, with the possibility of building vaults in the Northern Metropolis megadevelopment, according to authorities.

Financial Secretary Paul Chan Mo-po also said on Thursday the city was under “no pressure” to raise interest rates following a US rate hike, but stressed authorities would “keep a close watch” on the situation.

Speaking at a conference the day after the policy address and the first local five-year plan were unveiled, Chan elaborated on a proposal to increase the Exchange Fund’s gold portfolio, which currently represents a tiny fraction of the war chest used to defend the local dollar and is managed by the city’s de facto central bank, the Hong Kong Monetary Authority (HKMA).

Noting that other central banks had shown an interest in moving some of their gold to Hong Kong due to geopolitical concerns, Chan said the stewardship would offer the HKMA a further opportunity to accelerate the city’s transition into a global trading hub for the precious metal and other commodities.