Buyers and sellers through the new system will each be charged a fee of 0.04 percent, according to rules announced by the exchange.

The introduction of interbank gold trading will enable gold investors to choose from among a wider variety of investments and make gold trading more subject to market forces, the exchange said.

The interbank market will also lead to a significant increase in gold trading, Chen said.

It will eventually be opened to banks other than those that are currently approved, said Jiang Qi, a gold analyst with the Fujian province-based Industrial Bank Co Ltd. He said the system will help banks develop a greater number of financial products that are related to gold trading.

The exchange said in early November that it will initiate over-the-counter trading, gold exchange-traded funds, Friday-night trading and take steps to improve the leasing market.

China is opening its domestic market for precious metals to the international community as Shanghai looks to offer gold exchange-traded funds, said officials attending a conference on gold in Hong Kong.