* Fitch cuts Britain's top-notch credit rating     * Demand for coins, bars soars in Asian markets     * Gold drops over 11 percent in two weeks     * Coming up: Chicago Fed index Monday   (Updates throughout, adds market details)     By Frank Tang and Clara Denina      NEW YORK/LONDON, April 19 (Reuters) - Gold rose on physical buying on Friday, failing to hold onto earlier sharp gains, as bullion posted heavy losses for a second consecutive week on investor liquidation driven by months of disappointment over its performance.     The precious metal is down more than 5 percent this week after notching its biggest-ever daily loss in dollar terms on Monday. Bullion's collapse caught many veteran investors, who see gold as portfolio protection against inflation and other market risks, by surprise.     "With the significant move to the downside, gold is rebounding off its low on a pick-up in physical demand and short-covering," said David Meger, director of metals trading at Vision Financial Markets.     The market was supported later this week as consumers snapped up bars, coins, nuggets and jewellery as a slump in the price of the yellow metal released years of pent-up retail demand.  
  ID:nL3N0D6EQJ
       Still, analysts said more weakness could be on the cards, including further outflows from exchange-traded funds and possible calls by Federal Reserve policymakers to reduce the need for further monetary stimulus.      Traders also closely monitor options-related strategies in the futures market ahead of U.S. gold option expiration next week.     Gold  
  XAU=
   rose 0.6 percent to $1,398.96 an ounce by 2:52 p.m. EDT (1822 GMT), after trading as high as $1,424.51 in Friday's session.     U.S. gold  
  GCM3
   futures for June delivery settled up $3.10 at $1,395.60, with preliminary Reuters data showed trading volume set to finish lower than its 30-day average.     Gold was underpinned after Fitch Ratings became the second major international agency to strip Britain of its top-notch credit rating.  
  ID:nL5N0D63D9
       Still, it posted a two-week loss of over 11 percent, its largest decline over a two-week period since October 2008.    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.     The big question is whether gold has entered a lasting bear market after 12 years of consecutive yearly gains. Gold hit the lowest price since February 2011 and is now around $500 below its record high of $1,920.30 set in September 2011.      RETAIL RUSH     Dealers around the world said they saw heavy volumes of physical buying, even though prices had recovered nearly $100 since hitting a two-year trough this week. Buying improved in top consumer India after a lacklustre start.  
  GOLD/ASIA
    
  GOL/IN
       <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^      For a 24-hour gold chart analysis:       
  http://graphics.thomsonreuters.com/WT1/20131904100839.jpg
       Inflation adjusted gold price timeline (since 1970)      
  http://link.reuters.com/jem47t
       Gold demand in China      
  http://link.reuters.com/bat34t
       Gold in currencies      
  http://link.reuters.com/cyv95s
      ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>      However, holdings of the SPDR Gold Trust  
  GLD
  , the world's largest gold-backed ETF, are at their lowest in three years after falling by a further 0.2 percent to 1,133 tonnes on Thursday.  
  HLDSPDRGT=XAU
    
  GOL/ETF
       A plan by Cyprus to sell excess gold reserves to raise around 400 million euros ($523 million) sparked off gold's rout, as the news led to speculation that other indebted euro zone countries could follow suit.     Other precious metals were mixed as gold trimmed its gains, with silver  
  XAG=
   down 0.3 percent to $23.16 an ounce and palladium  
  XPD=
   1 percent higher at $673. Platinum  
  XPT=
   reversed earlier gains to trade down 0.1 percent at $1,421.49.  2:52 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT                 SETTLE   CHNG  CHNG                       VOL  US Gold JUN   1395.60   3.10   0.2  1385.40 1424.70  179,208  US Silver MAY   22.96 -0.285  -1.2   22.865  23.820   44,413  US Plat JUL   1423.90  -5.10  -0.4  1418.20 1449.90    7,510  US Pall JUN    677.05   7.25   1.1   665.60  681.70    3,189                                                                  Gold          1398.96   8.21   0.6  1386.73 1424.51           Silver         23.160 -0.080  -0.3   22.920  23.840  Platinum      1421.49  -1.01  -0.1  1420.50 1448.00  Palladium      673.00   6.50   1.0   667.50  680.00                                                                  TOTAL MARKET              VOLUME          30-D ATM VOLATILITY                 CURRENT   30D AVG  250D AVG   CURRENT     CHG  US Gold        187,328   222,671   178,310     21.71   -2.29  US Silver       53,941    60,047    54,087     34.09   -2.02  US Platinum      7,536    15,962    12,095     21.34    1.81  US Palladium     3,202     5,314     5,317                                                                                      (Additional reporting by Lewa Pardomuan in Singapore; Editing by Veronica Brown, Alison Birrane and James Dalgleish)  ((Frank.Tang@thomsonreuters.com)(+1 646 223 6126)(Reuters Messaging: frank.tang.thomsonreuters@reuters.net))  Keywords: MARKETS PRECIOUS/