Officials from Hong Kong and Singapore pitched rival plans to create gold trading hubs in Asia, underscoring fierce competition to secure new business and capitalize on strong demand for the precious metal.

Both financial centers are aiming to plug into established bullion markets by offering new contracts and services, including hosting central bank reserves, and have already secured the participation of local and international banks. Hong Kong launched trial operations of a gold clearing system in July, along with a new price benchmark.

“We are positioning ourselves as a super-connector and also a super value-adder,” Christopher Hui, secretary for Financial Services and the Treasury for Hong Kong, said during a panel discussion at the London Bullion Market Association’s annual meeting in Sorrento, Italy.

The world’s leading industry gathering offered a rare opportunity for representatives of both Asian centers to present their plans at the same forum. Toward the end of the year, Hong Kong will unveil details of offshore-yuan gold futures and allow banks to settle physical trades in real time and in multiple currencies, Hui said.

Singapore’s ambitions are similar. “We are trying to connect different liquidity pools,” Lim Cheng Khai, executive director of the financial markets development department at the Monetary Authority of Singapore, said during the panel session, citing over-the-counter trading in London, the futures market in New York and producers in Asia.

Both centers are also courting central banks, whose gold reserves can provide crucial liquidity through lending to commercial financial institutions. Singapore is expanding its storage capacity to become a custodian of bullion held by foreign central banks, while the People’s Bank of China has built up its reserves in Hong Kong in recent months.

Both Hong Kong and Singapore are tapping into a wider move toward diversification, which has already seen some central banks repatriate gold in recent years, challenging the status of historic hubs such as London and New York. Even a small share of the 39,000 tons held by central banks globally would bolster either center’s influence.

“What we are trying to do is not totally new,” Hui, the Hong Kong official, said on the sidelines of the conference. “Rather, we are really riding on this trend of the need to diversify.”Some participants at the LBMA event said there was room for both centers potentially to thrive, given the deep liquidity of the global market. Perhaps the biggest challenge, however, may lie in persuading market participants of the need to switch their business away from more established centers.

“If you talk to anyone, anywhere on the planet, what do you benchmark the price against? It’s the LBMA fix,” Gregory Frith, senior precious metals trader at Centalion, said during a separate panel session. “How do you evolve from that? You have to try and get ahead of the curve.”Hong Kong’s project has a strong political angle, with the city – already the world’s biggest market for offshore yuan – aiming to leverage gold to drive greater usage of the Chinese currency. It also has the advantage of potential collaboration with China-friendly gold-producing countries, such as Uzbekistan.

Proximity to China, however, might also be viewed as a risk. Centalion’s Frith said that — while he likes Hong Kong contracts — some traders might be more comfortable doing business in Singapore. “For companies and big traders, it all comes down to contracts — where do I feel the most comfortable?” he said.