Under the scheme, mainland investors can trade the offshore yuan 1kg gold bar in Hong Kong via one of 70 Chinese Gold & Silver Exchange Society members who have set up their subsidiaries in Qianhai, Shenzhen's special economic zone.

Cash settlements and physical gold delivery will be handled by ICBC Macau branch or OCBC Bank in Hong Kong and customers on the mainland that want physical bullion delivery in Qianhai will need to wait until the local gold exchange's vault is completed in April.

The first gold connect was established in 2015 between Shanghai and Hong Kong.

The Shenzhen-Hong Kong gold connects 70 Hong Kong gold trading participants, compared to 30 on the Shanghai-Hong Kong gold connect, with the latter only allowing Hong Kong investors to trade the Shanghai gold exchange. The former only allows mainlanders to trade gold in Hong Kong.

Links between China and Hong Kong are not new, with the first cross-boundary investment scheme, the Shanghai-Hong Kong Stock Connect, launched in 2014. The Shenzhen and Hong Kong stock exchanges were also connected at the end of 2016. 

Hong Kong chief executive Carrie Lam said the next step was to build similar gold trading schemes between Hong Kong and Dubai, Myanmar, and Singapore.