As a matter of fact, SGE has been working on restructuring its members. Well-known domestic securities companies like Shenyin & Wanguo Inc. are also looking forward to becoming members of SGE.

"Financial institutions including banks are penetrating individual investment in gold," said Niu Ye. "It reflects the central bank's determination to open the gold market. More members, like securities companies, futures companies and some foreign financial institutions will be engaged in SGE."

The Chinese central bank is drafting a regulation concerning gold trade management, which notes "qualified overseas gold institutions can also enter the SGE after being approved." It is a clear sign that when the management regulation is passed, foreign institutions can also become players in the Chinese gold trade market.

"The participation of overseas members will bring Chinese gold trade closer to the international gold trade and enhance market fluidity," said Yang Yijun, a veteran gold analyst.

"It is beneficial to introduce more members into the Chinese gold market," said Liu Shan'en, senior economic analyst with the Beijing Gold Economic Research Center.

Risk still exists

Due to the steady increase of the international gold price, gold has caught the attention of more and more investors. After the gold trade market was opened to individual investors, many people are beginning to invest in the gold market. Beijing Review found out that many people believe that gold is sure to generate a profit. In reality, the gold market still harbors risks. And investors should not follow trends blindly.

Cheng Fumin warned those new to the industry that "to speculate in gold is different from gold collection." The investment value of a certain kind of gold needs multi-faceted investigation. Take the lunar new year commemorative bullion, for example. Cheng pointed out that many people tend to believe that the limited edition nature of the bullion will boost its value. However, as Cheng noted, the commission charges can interfere with realizing the value of the commemorative bullion.

Xia Yeliang, economic professor with Peking University, pointed out it is important to investigate the proper time for gold investment.

"In addition to the U.S. dollar, crude oil as well as the international political situation, many other factors also contribute to the fluctuation of gold prices," Xia said, "These include the interest rate of major European and American countries, the gold reserve of central banks of other countries and gold exploration expenses."

Xia suggested people buy gold when the price is relatively stable or low and they should also follow market trends.