* Under $1,200 gold fails to attract buyers in June vs April
* India's import taxes, weak rupees, Chinese growth in focus
* Some sell gold products for fears of more losses
By Jan Harvey, Frank Tang and Siddesh Mayenkar
LONDON/NEW YORK/MUMBAI, June 27 (Reuters) - In April, after
gold dived more than $200 an ounce in two days, an unprecedented
scramble to buy everything from coins to jewellery at "bargain"
prices helped arrest the plunge, tempering fears of a prolonged
But not this time, say dealers and jewellers, who report
that consumers across the world are reluctant to buy even after
a price decline of almost $200 in 10 days as investors rushed to
liquidate their gold in anticipation of the Federal Reserve's
scaling back its bond-buying stimulus since November 2008.
The failure of everyday consumers to rush to gold's rescue,
as they did two months ago, suggests that prices may have much
further to fall as investors rush to liquidate, analysts say.
"The coin business is definitely a lot slower than April.
They are not lining up outside of the store," Craig Sklar, owner
of Ridgewood Coin & Stamp Gallery in New Jersey, said.
Spot gold fell 2 percent to below $1,200 an ounce on
Thursday, its lowest level since August 2010. It is now on track
for a record quarterly drop of 25 percent.
The absence of retail or collector buying likely has many
causes. Many consumers stocked up on gold in April and May, when
they reckoned prices were a bargain, leaving them less money or
cause to buy even more this time around.
With only two days left in the month, sales of the U.S.
Mint's American Eagle gold coins in June stand at only 47,000
ounces - one-fifth as much as in all of April, when sales hit a
3-1/2 year high. Silver Eagles sales are down 20 percent.
"The low prices back in April caused people to bring forward
demand. Now, there's no additional demand," says Ric Deverell,
Head of Commodities Research at Credit Suisse.
Other factors are choking demand in India and China, which
buy more than half of the world's physical gold, including
recent import trade restraints and a liquidity squeeze.
Although activity has picked up a bit from earlier in the
month, it has been underwhelming thus far.
Coin buying is "not as active as I thought it would have
been," said Michael Kramer, president of Manfra, Tordella &
Brookes (MTB), a major U.S. wholesale coin dealer in New York.
(Global gold demand: http://r.reuters.com/vex85t)
INDIA IMPORT LIMITS ADD TO WOES
In India, soaring gold import levies and a record low in the
rupee against the dollar following a 40 percent drop since 2011
dealt a double whammy to any hopes of strong physical demand in
the second half of this year from India, traditionally the
biggest bullion consumer.
"My June import figures are dismal," said Daman Prakash
Rathod, director with Chennai wholesaler MNC Bullion.
India recently introduced measures requiring importers to
pay upfront for inventory, making it difficult for smaller
jewellers with lower working capital to source supplies. The
government also raised the import duty to 8 percent in May to
keep a lid on the surging current account deficit.
"It's difficult to garner capital for paying cash to
importing agencies to get the stocks," Rathod said. "I analysed
my costs and benefits, and considering that I felt it's not
worth unless business is in big volumes."
While in dollar terms gold is now more than $100 an
ounce below its April low, Indian gold futures are still
3 percent above their cheapest that month, further discouraging
price-sensitive Indian consumers.
Concerns over bank liquidity in China, which rocked stock
markets in Shanghai this week, may also be weighing on gold
demand in the short term, analysts said, as buyers worry about
the impact of a slowdown in Chinese growth and a possible credit
"There is no buying spree," said one analyst with a physical
gold investment firm in China. Some buyers are hoping prices
will fall further, he said. But also some "bought too much when
gold prices fell to $1,300 and now their cash is tight."
In the United States, some wholesalers see a reversal of the
previous trend, with retail investors selling metal back onto
the market rather than hoarding it as earlier this year.
"I am actually starting to get some calls to liquidate
physical metals, and that was nowhere to be found in April,"
said Brad Yates, metals trader at major U.S. refiner NTR Bullion
Group in Dallas.
Eric Harris, co-owner of New York speciality jewellery store
Niletti Creations, said he's bought scrap metal from customers
who "want to catch the price before it drops even more."
Investors, not individuals, are likely to hold the key for
prices, however. The world's eight largest gold ETFs lost 530
tonnes of gold in the first half of 2013, equivalent to about 10
percent of annual gold production.
"Net/net, the selling that we've seen over the last few
weeks has been stronger than the buying that has come through
from the traditional physical markets," says Michael Widmer, an
analyst at Bank of America-Merrill Lynch.
"If you want higher prices, it will not necessarily come
through the buy side, sales have to subside."
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Leslie Gevirtz)