NINE hundred kilograms of gold, worth 244.44 million yuan (US$36.88 million), changed hands Friday evening in Shenzhen, kicking off Hong Kong’s second cross-border market with the mainland under the Gold Connect program.

The new connection follows the Shanghai-Hong Kong gold connect in July 2015 that allowed Hong Kong people to invest in mainland gold markets.

The Shanghai-Hong Kong gold connect only allows Hong Kong investors to trade on the Shanghai gold exchange, while the Shenzhen connect only allows mainlanders to trade gold in Hong Kong.

Haywood Cheung Tak-hay, president of the Chinese Gold and Silver Exchange Society, said the new linkage would boost gold trading activity between Hong Kong and the mainland and also aid jewelry manufacturers to lower costs.

“We can serve 2,000 to 2,500 gold and jewelry manufacturers in Shenzhen,” Cheung said. “If the warehouse is in Shenzhen, their logistics, insurance and daily trade will be made more convenient and their costs a great deal lower.”

Cheung said the next goal is to connect with Dubai, Myanmar and Singapore, following the completion of its bonded warehouse in April 2018 in Qianhai in Shenzhen.

Under the new gold connect, mainland investors can authorize any of the 70 Hong Kong dealers located in Qianhai to buy and sell gold bullions, and settle the transactions in cash or by physical delivery. Mainland customers who want physical bullion delivery in Qianhai will need to wait until April when the gold exchange’s vault in Qianhai is completed. (SD-Agencies)