SHENZHEN Development Bank yesterday offered individuals the chance to trade in gold bars.
Under the program, individual investors can trade gold from a threshold of 100 grams, which would need an investment of about 19,000 yuan (US$2,547) based on yesterday's prices on the bourse.
The main selling point is that investors can take the bullion home at prices lower than those sold by jewelers and coin makers, who sell bullion with a premium of more than 10 percent.
"The services are offered on the backdrop of the traditional Chinese love for gold to add to their investment portfolio, especially when asset prices for stock and real estate have gained so much," said Qiu Weiping, president of the Shanghai branch of the Shenzhen-listed bank.
The bank join the market after rival Fujian Province-based Industrial Bank became the first commercial lender to team up with the Shanghai Gold Exchange to offer individual gold bullion trading in July.
The bourse said it plans to join hands with more commercial banks to trade gold for retail investors.
The pace of opening the market depends on the system compliance of lenders, as the bourse's system has been ready for two years.
The Shanghai branch of the Industrial and Commercial Bank of China started running gold trades on a trial basis in July 2005.
Lenders, including Bank of China and China Construction Bank, have already offered paper gold trading, where investors can't hold the bullion but bet on prices through a special bank account.
Gold prices have risen 21 percent this year and are expected to further gain.
Chinese people traditionally have kept gold bullion on hand to hedge against inflation and as a symbol of good fortune.
The country is the world's third-biggest gold consumer.
The People's Bank of China, the nation's central bank, granted the go-ahead for the Shanghai gold bourse to kick off nationwide gold trading services at the end of last year.
China deregulated its gold market in late 2002.