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. 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. US 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.
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.