* H1 gold consumption up 54 pct to 706.36 tonnes - China
* First-half gold output up 9 pct at 192.82 tonnes
* H2 demand may not be as strong as first-half
(Adds comments from analyst, details on China demand)
By A. Ananthalakshmi
SINGAPORE, Aug 12 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 percent 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.
"They bought much more than usual in April and May to meet
the need for later in the year."
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 U.S. economy stirs worries of a
scale-back in the Federal Reserve's stimulus measures.
"China's demand in April and May was unmatched," said one
Shanghai-based trader. "They bought more than anyone and were
consistent buyers even after prices recovered a little."
China's gold demand could hit a record 1,000 tonnes this
year and will overtake India, the World Gold Council said last
India's consumption this year is expected to be lower than
last year's 860 tonnes as the government is trying to curb
imports and reduce its trade deficit.
The Chinese government does not release data on gold
consumption or imports. Investors rely on data from trade groups
such as the CGA and import numbers from Hong Kong - a key
supplier to China - to gauge demand.
"All signs have been pointing towards China overtaking
India. Their demand in the second half may not be this high, but
they are still way ahead of India," said the Shanghai-based
Chinese consumers would like to see more stability in prices
and not just lower prices, which is why Chinese demand is
subdued currently, analysts and traders said.
The CGA also said output in China, the world's biggest gold
producer, reached 192.82 tonnes in the first half, up 9 percent
from a year ago.
(Editing by Himani Sarkar and Muralikumar Anantharaman)