PRECIOUS-Gold up on physical buying but seen vulnerable

* Asian demand for gold bars, coins lifts spot prices * SPDR holdings fall 0.7 percent on Tuesday * Cyprus gold sales within next months By Frank Tang and Clara Denina NEW YORK/LONDON, April 17 (Reuters) - Gold rose in choppy trade on Wednesday as the two-year low it hit the previous session triggered Asian physical buying, but the market had trouble holding on to gains and is seen vulnerable to further sell-offs. Bullion was sharply off its earlier high as economic worries roiled global markets. Sharp losses in U.S. equities and industrial commodities led by copper and crude oil continued to weigh on gold, a traditional inflation hedge. Sentiment among gold investors remains shaken as bullion's historic selloff prompted markets to assess the damage to the metal's status as safe haven. There were signs of improving physical demand from Asia, especially India, historically the world's largest bullion consumer. In addition, coin investors sought out potential bargains at sharply lower prices after gold's sell-off. "We are seeing a lot of retail buying and not a lot of commercial and certainly not fund buying in this particular rally back," said Frank McGhee, head precious metals trader of Integrated Brokerage Services LLC. "Investors are still very wary about economic slowdown and deflation," McGhee said. Spot gold was up 0.5 percent at $1,373.96 an ounce by 2:04 PM EDT (1804 GMT), having tumbled to its lowest since January 2011 at $1,321.35 on Tuesday. The market fell by a combined $225 on Friday and Monday, which compares with a total trading range of $260 in 2012. It is down about 18 percent so far this year, at risk of posting its first annual loss after 12 consecutive years of gains. Asian physical buying pushed up premiums for gold bars in Singapore to their highest in 18 months at $1.70 an ounce to spot London prices. India celebrates major gold-buying festival Akshaya Tritiya next month, and the wedding season will continue until early June. U.S. Comex June gold futures settled down $4.70 at $1,382.70 an ounce. Turnover was heavy as trading volume has exceeded its 30-day average, preliminary Reuters data showed. CYPRUS GOLD SALES WEIGH Worries are also festering that other indebted euro zone countries could follow Cyprus in selling bullion reserves to raise cash after the island's finance minister Harris Georgiades expected a sale within the next few months. Investors continued to exit holdings of exchange-traded funds, with holdings in the world's largest gold-backed fund SPDR Gold Trust falling 0.73 percent to 1,145.92 tonnes on Tuesday from 1,154.34 tonnes on Monday. Holdings of global gold ETFs are currently at their lowest since late 2011.. Among other precious metals, platinum and palladium fell on news that demand for new cars in the European Union declined for the 18th consecutive month in March, down 10.2 percent to 1.3 million. Spot platinum fell 1 percent to $1,428.49 an ounce, having touched its lowest since last August in the previous session. Palladium was down 2.7 percent to $658.97. Silver edged down 0.6 percent to $23.22 an ounce. 2:04 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold JUN 1382.70 -4.70 -0.3 1365.00 1395.20 213,752 US Silver MAY 23.307 -0.321 -1.4 22.835 23.725 76,439 US Plat JUL 1435.40 -15.20 -1.0 1422.50 1452.80 9,368 US Pall JUN 661.40 -16.80 -2.5 658.25 683.35 4,738 Gold 1373.96 6.17 0.5 1365.93 1394.60 Silver 23.220 -0.150 -0.6 22.900 23.720 Platinum 1428.49 -15.01 -1.0 1424.75 1448.75 Palladium 658.97 -18.53 -2.7 661.25 679.75 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 226,317 210,730 176,556 23.87 0.80 US Silver 106,002 54,248 53,527 37.98 -9.26 US Platinum 9,442 15,754 12,020 21.34 1.81 US Palladium 4,870 5,119 5,307