The precious metal depository at Hong Kong International Airport opened today and was appointed by the Mercantile Exchange as a gold storage and physical settlement venue for its members and market participants.

Unveiled by Financial Secretary John Tsang at a ceremony today, the 340-square-metre depository will enhance Hong Kong's position as a trading and logistics hub for precious metals by providing secure storage and physical settlement services to central banks, commodity exchanges, bullion banks, precious metal refineries and issuers of exchange traded funds.

Mr Tsang said: "The depository will help tap into opportunities from the growing demand for gold and other commodities in the region."

He added this ties in with the Government's policy to enhance Hong Kong's position as an international financial and logistics centre.

Airport Authority Chief Executive Officer Stanley Hui and Mercantile Exchange President Albert Helmig also signed an agreement requiring all clearing members of the exchange to keep gold-bar stock at the depository.

The facility can provide centralised storage and physical settlement services, minimising transportation costs and reducing settlement risks for precious metals including gold, silver, platinum and palladium. It will also provide a safe and secure storage facility for local and overseas government institutions.

The Monetary Authority is planning to transfer its physical gold reserves stored at other vaults to the depository later this year.