The latest 2025 Policy Address indicates that Hong Kong is comprehensively accelerating the development of an international gold trading market. With gold prices repeatedly breaking historical records and geopolitical dynamics and monetary policies resonating, the global financial significance of gold has been further amplified. Hong Kong hopes to leverage its unique geographical location and institutional advantages to regain its former status as Asia's gold trading hub.

1. Policy promotion: Acceleration of gold industry chain construction

In his Policy Address, Chief Executive John Lee pledged to boost Hong Kong's gold storage capacity to over 2,000 tons within three years and establish the city as a regional gold reserve hub. This goal far exceeds the current capacity of 200 tons and represents a nearly tenfold expansion of Hong Kong's gold storage capacity.

At the same time, the government has also planned a number of supporting measures:

• ● Establishing the Hong Kong Gold Central Clearing System, Providing efficient and reliable clearing services for international standard gold transactions;
• ● Deepen cooperation between Shanghai and Hong Kong, invite the Shanghai Gold Exchange to participate in the interconnection, and give full play to the dual advantages under the "one country, two systems";
• ● Promote the construction of refineries, encourage gold traders to set up or expand refining facilities in Hong Kong, and explore cooperation with mainland processing;
• ● Enrich investment products,including innovative tools such as gold funds and tokenized gold to meet the needs of global investors;
• ● Establish a gold industry association, to serve as a bridge for communication between the industry and the government and regulators, and actively expand the "Belt and Road" market.

These measures cover physical gold, financial derivatives and digital assets, and aim to form a complete gold industry ecosystem.

2. Tokenization and New Financial Products: Attracting More Investors

The report's proposal for tokenized gold has garnered significant attention. Tokenization involves breaking gold into smaller units through blockchain, lowering investment barriers and enabling instant transactions.

Industry insiders analysis:

• ● Wen Jie, director of the Hong Kong Stock Analysts Association pointed out that tokenization can help more ordinary investors get involved in gold and increase market liquidity.
• ● Yuanyu Securities Fund Investment Director Lin Jiaqi believes that the tokenization of gold can achieve instant transactions, which is very attractive to international funds and will attract more global investors who are not paying attention to Hong Kong stocks to flow into the Hong Kong market.

This means that the investment group in Hong Kong's gold market will be more diversified, expanding from institutions to small and medium-sized investors, and market vitality will be significantly enhanced.

3. Capital Flows: Federal Reserve Policy and Global Risk Aversion

The rise in gold prices is due to the continued increase in global capital's demand for safe-haven assets.

The recent weakening of the US dollar, declining US Treasury yields, and expectations of a Federal Reserve rate cut have pushed gold prices above $3,700 per ounce for the first time, bringing their year-to-date increase to 40%. Local gold shops have also seen prices for 999 gold jewelry surpass HK$40,000 per tael, setting a new record.

Market analysis believes that:

• ● If the rate cut pace is in line with expectations, gold may further hit $4,000/ounce;
• ● If the policy turns hawkish, there may be short-term fluctuations, but the long-term bull market logic will remain solid.

In addition, as geopolitical risks intensify and concerns about the independence of the Federal Reserve increase, central banks around the world continue to increase their gold reserves, further boosting demand.

4. Russian Gold: A New Variable in Hong Kong

In addition to policies and markets, the geopolitical situation has also made the Hong Kong gold market more popular.

Data shows that in April 2025, Russian gold exports to Hong Kong totaled US$367.2 million, a 27-fold year-on-year increase. Meanwhile, Hong Kong's gold exports to mainland China also surged 90% year-on-year to US$6.1 billion.

Behind this lies the real-world tussle between the Russia-Ukraine situation and Western sanctions. These factors have made gold Moscow's most liquid "hard currency." For China, the Russian gold price is typically $20 to $50 per ounce lower than the international price, creating arbitrage opportunities.

Hong Kong, with its status as the world's largest offshore RMB liquidity pool and mature settlement system, has become a key channel for Russian gold exports. This reality highlights the geostrategic significance of Hong Kong's gold market, beyond its financial attributes.

5. Historical Review and Current Opportunities

In fact, Hong Kong's role in the gold market is nothing new. As early as the 1970s and 1980s, Hong Kong was the world's third-largest gold trading center after London and Chicago.

At the time, investors flocked to Hong Kong for arbitrage opportunities, and "Hong Kong Gold" enjoyed a global reputation. However, with the implementation of the Hong Kong dollar's linked exchange rate system, the rise of the Shanghai Gold Exchange, and the diversion of funds to emerging markets such as Singapore and Dubai, Hong Kong's status as a gold hub gradually declined.

Today, with global risk aversion on the rise, Hong Kong has once again had the opportunity to regain its status as a gold hub thanks to policy support and the influx of Russian capital.

6. Outlook: The role of super connectors becomes more prominent

Zhang Dexi, chairman of the Hong Kong Gold Exchange, said that as a "super connector", Hong Kong has the backing of the huge market in mainland China and can connect with the world, which is a natural advantage for developing the gold industry.

If the expansion of gold storage capacity, the central clearing system and innovative tools are successfully implemented, Hong Kong is expected to reshape its status as an international gold trading center within three to five years and attract more international capital.

From policy initiatives to record-breaking gold prices and the influx of Russian gold, Hong Kong's gold market stands at a new turning point. Policy support and innovative products will lower investment barriers, while international capital and geopolitical dynamics will further strengthen Hong Kong's role.

It can be foreseen that under the combined effects of global monetary easing and risk aversion, Hong Kong's efforts to build an international gold trading center is not only a financial strategy, but also the key to reshaping an international financial hub.

Investing in gold, choosing a formal platform is more important

For ordinary investors, the gold bull market is certainly attractive, but in order to make a stable layout in a volatile market, they need to rely on a compliant and secure professional platform.

Among many platforms, Prestige International (Hong Kong Gold Exchange Class AA No. 025 member and board member) is undoubtedly a trustworthy choice:

• ● Compliance Qualifications: More than 15 years of experience in the industry and possessing the highest level AA bank member qualification;
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• ● High-quality trading environment: 0 commission, spread as low as 0.1, STP straight-through trading mode, 98% of orders completed within 18 milliseconds;
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More importantly, Prestige International is not only an AA-rated member but also a co-director of the Hong Kong Gold Exchange's Board of Directors. This means Prestige International not only serves investors but also participates in the development and reform of industry rules, maintains close communication with regulators, and actively promotes transparency and internationalization of the gold market. Going forward, Prestige International will continue to collaborate with the Hong Kong government on governance, contributing to warehousing expansion, clearing systems, and new investment tools, thereby contributing to Hong Kong's development as an international gold trading hub.

Against the backdrop of an accelerating gold bull market, choosing a leading platform like Prestige International, known for its compliance, security, and commitment to industry reform, is the first step for investors to seize opportunities. As Hong Kong pushes forward in its development as an international gold trading hub and global capital continues to pour in, truly visionary investors are already planning for the future through Prestige International.