China’s gold consumption in the first six months of the year rose more than 50 percent, as a fall in prices boosted demand, in line with expectations that the country is set to surpass India to become the world’s top gold consumer, data released on Monday by the China Gold Association, or CGA, showed.

China’s gold consumption soared 53.7 percent to 706.36 tons in the first half of the year, compared to 460 tons consumed in the same period last year, CGA said in a statement. Gold-bar purchases rose 87 percent to 278.81 tons, and jewelry purchases surged 44 percent to 383.86 tons, while gold demand from industries dropped by 1.6 percent, the statement said, according to China Daily.

According to CGA, a significant drop in the price of gold -- which lost about 20 percent of its value this year after 12 consecutive years of gains -- have attracted Chinese buyers to the precious metal.

"China bought a lot when prices fell below $1,350 in April thinking it will not fall further," Chen Min, precious metals analyst at Jinrui Futures, told Reuters. "They bought much more than usual in April and May to meet the need for later in the year," he added.

According to the World Gold Council’s forecast, China could overtake India as the top gold consumer in the world by the end of this fiscal year. Demand for gold in China is expected to touch 1,000 tons while India’s gold consumption is projected to hit between 865 tons to 960 tons for the current year.

In 2012, gold consumption in China -- the world’s second-largest economy -- stood at 832.18 tons, up 9.35 percent from a year-ago period, while gold consumption in India stood at 864.2 tons.

"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," a Shanghai-based trader told Reuters. 

China, the world’s biggest gold producer, produced 190 tons of gold in 2012, up 9 percent from a year ago, the CGA said in the statement. In comparison, India produced less than 3 tons of gold in 2012, a World Gold Council spokesperson told International Business Times.

In both China and India, gold is an essential part of local culture and tradition, and people purchase gold during weddings and festivals. India, which depends on imports to meet its gold demand and has been suffering from a severe depreciation of its domestic currency and a yawning deficit, has taken several measures this year to curb demand including hiking import duties on gold.