JPMorgan will officially open its Singapore precious metals storage facility Wednesday, an official at the bank said.

The facility, which is located within a free-trade zone at the city-state's Changi international airport, will accommodate physical settlement of Singapore Mercantile Exchange gold futures contracts and other transactions involving physical settlement in which JPMorgan Chase & Co. (JPM) is involved.

The facility will also hold regional allocations of exchange-traded funds, the bank said.

This is a significant step for us to have a direct exposure to the physical gold market in Asia," said Tim Wilson, JPMorgan's head of Asia marketing of global commodities.

"We've seen increasing appetite from investors and clients to diversify the location of their gold holdings and our vault facility provides an alternative site to places such as London, New York and Zurich," he said.