Singapore’s Abaxx Exchange plans to introduce gold futures in the coming months amid rising gold prices and growing interest in the metal. The exchange aims to connect futures and physical gold markets in one location, positioning itself as a key player in Asia’s precious metals market.
Gold Prices Reach Record Highs
Gold has experienced significant growth this year, continuing a trend that saw prices surge 27% in 2024. This has made gold one of the best-performing major commodities. The surge is driven by strong demand from central banks and investors seeking a safe haven. In recent weeks, geopolitical instability, particularly U.S. President Donald Trump’s trade and foreign policy moves, has further boosted interest in gold.
In addition, futures prices on New York’s Comex have surged past international benchmarks, including spot prices in London. This rare discrepancy highlights concerns that gold may face U.S. tariffs. The gap echoes a similar disconnect during the pandemic and has resulted in significant gold outflows from London vaults.
“Having futures in New York and the physical market in London allows market events to drive price differences between futures and spot markets,” said David Greely, chief economist at Abaxx Technologies. “We saw this during the pandemic and are seeing it again with the current concerns over potential tariffs.”
Singapore’s Role in the Global Gold Market
Singapore has long aspired to become a global hub for precious metals trading. The city-state exempted investment-grade gold, silver, and platinum from its goods-and-services tax in 2012. This move, along with Singapore’s strategic location near key Asian markets like China, makes it an ideal location for gold trading, according to Albert Cheng, CEO of the Singapore Bullion Market Association.
Greely emphasized Asia’s deep interest in physical gold, especially in the form of kilogram ingots, which are more common in Asia than in markets like London and New York. “Asia is a kilobar market. The region deserves its own marketplace, and we think Singapore is the perfect location for that,” he said.
Challenges and Competition
However, Singapore still lacks the volume of physical gold seen in London, where around 8,500 tons of metal support the global bullion market. For Abaxx Exchange or any new entrants to succeed in Singapore, they will need strong suppliers to ensure liquidity for their gold futures contracts, according to Cheng.
Previous attempts to launch precious metals products in Singapore have not always been successful. In 2014, the Singapore Exchange (SGX) launched gold futures but withdrew the contract four years later due to lack of trading volume.
Abaxx’s Expansion Plans
Abaxx Exchange currently offers futures for commodities like liquefied natural gas, carbon, and nickel-sulphate. In March, the exchange plans to expand its offerings to include lithium-carbonate contracts, as it seeks to meet the growing demand for electric vehicle metals and the increasing need for risk management solutions in the battery materials sector.
As the global demand for gold continues to rise, Abaxx’s entry into the gold futures market positions it to capitalize on the growing interest in Asia, especially in Singapore.
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