A statue of Damien Hirst holding a gun is the artwork attracting most attention at the 28th Madrid International Contemporary Art Fair, ARCO, opening today.

Sculptor Eugenio Merino’s parody installation shows the U.K. artist in suicidal pose with blood pouring from his head. Barcelona’s ADN gallery last night said it sold the work for 26,000 euros ($33,500). The prices for Hirst’s art symbolize the art boom of the past four years.

ARCO is southern Europe’s largest art fair, with 238 galleries from 32 countries. Dealers said they will be watching the fair after contemporary-art prices dropped between 30 and 50 percent in six months, hurt by the bank crisis and economic slump, which have deterred buyers and sellers at auctions.

“Prices climbed way too quickly over the past three years, and if they now fall to the level of 2005, or even 2004, that won’t be a bad thing,” said Edward Tyler Nahem, owner of Edward Tyler Nahem Fine Art in New York. “Collectors are returning to the market after being priced out.”

Merino’s work was sold to a Florida collector, ADN said. Produced over the past two months, it is called “For the Love of Gold” and takes its name from Hirst’s “For the Love of God,” a diamond-encrusted platinum skull that Hirst said he sold in summer 2007 for $100 million to a group of investors. London’s White Cube gallery said Hirst was part of that group himself.

The life-size silicone sculpture of Hirst in Madrid, with real human hair and glass eyes, clutches a Colt 45 and wears a skull T-shirt. The tank is made to look like those Hirst uses to display dead animals pickled in formaldehyde.

Expensive Hirst

“Hirst is always trying to think of ways to make his art the most expensive,” Merino said in an interview, standing next to his sculpture. “If he killed himself, then the value of his art would increase a lot.”

Nearly a third of the ARCO galleries are from Spain. German galleries make the second-largest group. While this year’s focus is India, there are only 13 galleries from that country. The number of U.S. galleries dropped to seven from last year’s 26.

Dealers said ARCO’s VIP days on Feb. 11 and yesterday avoided the stampedes of recent years at major international shows such as Art Basel, and the Frieze Art Fair in London.

While Nahem said that overall market prices are dropping between 10 percent and 30 percent, he hasn’t yet lowered prices. At ARCO he offers Alexander Calder’s mobile sculpture “Trois noirs sur un rouge” (1968) for 2.1 million euros, and Gerhard Richter’s oil on aluminum “Abstrkates Bild” (1994) for 1 million euros.

Dinosaur Skeleton

London-based Haunch of Venison, owned by Christie’s International, offers Jitish Kallat’s “Aquasaurus” (2008) for $360,000. The installation depicts a water-tank truck crafted to look like a dinosaur skeleton. The Mumbai artist speaks against poverty in India’s business capital, where a delivery truck remains the only source of water for many residents.

Galerie Thaddeus Ropac, which has spaces in Paris and Salzburg, is offering Georg Baselitz’s “Sujet Point (Remix)” (2007) for 425,000 euros, and sold Anselm Kiefer’s “Odi navali” (2005) for 500,000 euros. A group of four photos from 1984 by Robert Mapplethorpe sold for $80,000. One features a scorpion crawling on a naked woman.

“I don’t feel people have stopped buying,” Benedicte Burrus of Galerie Thaddeus Ropac said. “Interest is still strong.”

Wetterling Gallery of Stockholm offers Andy Warhol’s ink and diamond dust on board portrait “Georgia O’Keefe” (1977) for 150,000 euros. A year ago, the gallery said the artwork was selling for 300,000 euros.

Offer Hopes

“If I was a collector I’d make an offer,” said Bjorn Wetterling, the gallery’s owner. “You’d be stupid not to.” He said the current market crisis is easier for him than the one in the early 1990s. “Back then I had debt, and now I don’t,” said Wetterling.

Many visitors said they enjoy ARCO for the bargains. There is an abundance of artworks for less than 30,000 euros. GMG gallery from Moscow sold two photographs by Anatoly Zhuravlev, “Big China” and “Big India,” each for 10,000 euros. Originally each was priced at 14,000 euros.

“We gave the discount because they were bought by a prominent Swiss collector of Chinese art,” said Marina Goncharenko, the gallery’s owner. GMG is the only Russian gallery at ARCO.