Singapore Opens a 500-Ton Gold Vault for Central Banks. Are They Still Buying?
The Monetary Authority of Singapore (MAS) has launched a gold vaulting service for foreign central banks. The national currency vault can hold up to 500 tonnes.
The launch is a bet that central banks will keep buying gold. Their purchases have held up this year, even as gold prices fell.
Why Singapore Built a Gold Vault for Central Banks
Singapore’s Deputy Prime Minister Gan Kim Yong tied the new vault to rising central bank gold demand.
“With growing demand for gold as a reserve asset, central banks are looking for more options to strengthen their resilience,” Gan said.
Central banks are also reassessing where they store their gold. A September WGC report cited by CNBC found several countries diversified storage over the past 12 months.
Singapore also plans tax exemptions for wholesale gold services such as vaulting and refining.
Its gold clearing system should begin live trading in the first quarter of 2027. Still, Nikolas Kavalis of Metals Focus cautioned that storage alone cannot build a full bullion market.
The bigger challenge is liquidity, he said, meaning enough trading activity to compete with London. Central bank gold could help build it, especially if stored bullion can also be used in trades, CNBC reported.
That makes the vault’s success partly a question of how much gold central banks keep buying.
Central Banks Said They Would Buy More Gold, and They Did
In June, a record 45% of central banks told the World Gold Council (WGC) they planned to add gold. Some 89% expected global holdings to rise, its annual reserves survey found.
Central banks followed through, buying 321 tonnes in the third quarter, above the five-year quarterly average of 227 tonnes, according to WGC data.
The WGC then raised its central bank outlook and now expects 2026 purchases to at least match 2025.
China’s central bank kept buying in October, adding about 25.8 tonnes. That was its biggest monthly increase in three years.
Yet steady buying has not stopped gold from falling.
Can Central Bank Buying Hold Gold Above $4,000?
Gold traded at $4,043.27 on Wednesday. That is about 28% below the January record of $5,608.35. Overall, the precious metal is down over 6% in 2026.
Rate hike bets have weighed on the metal. Gold fell nearly 3% on Tuesday after hotter-than-expected US inflation data.
Markets now price in about a 100% chance of a December Federal Reserve rate hike. Higher rates raise the cost of holding gold, which pays no yield.
Central banks, however, have tended to buy more when gold falls. The WGC found a -0.7 correlation between their demand and gold’s quarterly returns since Q3 2022.
Still, the council warned the link is too unstable to set a firm price floor. The December Fed decision will test whether central bank buying can offset higher rates.
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