China's consumption of gold in the first six months of the year surged by more than half as sliding prices of the metal lured buyers, data showed, reinforcing expectations that the nation will overtake India as the world's top gold consumer this year.
Gold prices have lost about a fifth of their value this year after 12 years of gains, releasing pent-up demand across the world and particularly in India and China, where gold is an essential part of weddings and gift-giving.
China consumed 706.36 tonnes of gold in the first half of 2013, up 54% from the year-ago period, the China Gold Association (CGA) said in a statement on its website on Monday.
It consumed 832.18 tonnes in all of 2012 and about 460 tonnes in the first half of 2012.
"China bought a lot when prices fell below $1,350 in April thinking it will not fall further," said Chen Min, precious metals analyst at Jinrui Futures in Shenzhen. In April, gold witnessed its biggest two-day fall in 30 years. The metal has recovered after dropping below $1,200 in June, but is still subject to volatile trading and negative sentiment as a recovering US economy stirs worries of a scale-back in the Federal Reserve's stimulus measures.