* Gold premiums surge in Asia, but demand patchy
* Some consumers wait for prices to weaken further
* Gold prices have dropped about 19 pct this year
By Lewa Pardomuan
SINGAPORE, April 16 (Reuters) - Consumers swooped to pick up gold in Asia after the precious metal slumped to a two-year trough on Tuesday, although some buyers were waiting to see if prices might weaken even further as the outlook for the asset turns sour.
The decline - gold has dropped 12 percent since Friday - resulted in brisk sales in parts of India and China, which together account for more than a third of global gold demand, according to the World Gold Council.
Gold prices are now more than $500 below a record in September 2011, attracting buyers and sending premiums for gold bars to a 16-month high in Asia.
“If you compare the number of customers from last week, the walk ins have doubled this week,” said T. Rajesh Kumar, manager of NAC gold jewellers in Chennai. “Our profits have slipped but volumes are up.”
Bargain hunting lifted premiums in Hong Kong to $2 an ounce to the spot London prices from $1.60 to $1.70 last week as shops in the former British colony saw a rush in purchases of jewellery and gold nuggets. Hong Kong, the centre for bullion trading in East Asia, is also China’s main source for gold imports.
Liu Yu Ning, vice general manager at Jingyi Gold in Beijing, said selling of physical gold on Monday had risen 60-70 percent at the firm from the daily average last week because of lower prices.
In Japan, where mostly elderly residents had lined up just last week to sell unwanted jewellery, buyers outnumbered sellers on Tuesday as consumers also fretted about the new economic policies of Prime Minister Shinzo Abe.
Premiums for Japanese gold bars strengthened to as high as $1 from flat to discount last week, and there was also buying interest related to tensions on the Korean peninsula.
“Bank deposits generate virtually zero interest,” said Yujiro Yamashita, 63, who bought 100 grams of gold at Ginza Tanaka, a jewellery shop in the Ginza shopping district in central Tokyo.
Despite the interest in Hong Kong and India, the buying is unlikely to translate into significant support just yet for gold. The precious metal scored a modest rebound on Tuesday after enduring its biggest ever daily drop in the previous session, falling $125 an ounce.
Spot gold was up 2.49 percent to $1,386.41 an ounce at 1017 GMT, a gain of $33.66.
But the market is overshadowed by fears of central bank sales and global growth, which have prompted investors to dump their holdings.
Heavy outflows on global gold exchange-traded funds, which trimmed holdings to their lowest in more than a year, may also mark the end of a love affair between gold and investors.
Some jewellers in Asia said they would not begin adding to gold stocks until a clearer picture of consumer demand emerged.
Jewellery demand accounted for about 43 percent of global gold demand in 2012, versus about 34 percent for investment, according to the World Gold Council.
“This is a dilemma among physical buyers. The price really looks cheap compared with just a few days ago, but on the other hand, investors and jewellers in Asia get very jittery when prices are falling at such an alarming rate,” said Joyce Liu, an investment analyst at Phillip Futures in Singapore, who pegged support at $1,310.
The fall in prices could revive seasonal demand from India which usually sets the gold market alight but which has been hurt this year by a weak rupee and government taxes on imports.
India’s gold imports fell 24 percent in the first quarter.
Jewellery is an essential part of the dowry Indian parents give to their daughters at weddings.
Physical dealers in Singapore, who sell gold to India, pushed up the premiums for gold bars to their highest since October 2011 to offset declines in the cash prices XAU-SG-PREM.
Omkar Vala, a gold bullion trader in Dubai’s Gold Souk, said more than 90 percent of sales were to Indians, partly because of the traditional wedding season. The Gulf Arab emirate, popular with sun-seeking Western tourists and expatriates, is a centre for gold trading in the region.
“Saturday, yesterday also (saw) big business. The people from India and the Middle East want to invest in these types of things,” he said. “Maybe it’s going up so everybody is thinking they must buy.” (Additional reporting by Risa Maeda, Osamu Tsukimori and Chikafumi Hodo in TOKYO, Polly Yam in HONG KONG, Daniel Fineren in DUBAI and Siddesh Mayenkar in MUMBAI; Editing by Amran Abocar and Ed Davies)