SINGAPORE, Sept 24 (Reuters) - Gold clung to overnight gains
on Wednesday as Asian shares retreated, but investors remained
cautious amid a firmer dollar and upbeat U.S. manufacturing data
that kept prices near their lowest since January.

U.S.-led strikes against militants in Syria failed to spur
follow-through safe-haven demand for gold after small gains on
Tuesday. Gold is traditionally seen as a safer bet during times
of political uncertainty.

The tensions in Syria, however, curbed appe-e for risky
-ets, sending Asian shares lower.

Spot gold was holding steady at $1,223.40 an ounce at
0359 GMT. It had gained 0.7 percent in the previous session as
the dollar fell on profit-taking after 10 weeks of gains.

But the dollar index was still trading near a four-year peak
on Wednesday.

"The trend is still bearish for gold right now," said Peter
Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

"The dollar is very strong and will continue to put some
pressure on precious metals," he said.

"More so, as physical demand is not strong enough to support
prices."

Sluggish physical demand in Asia could weaken support for
any price rally and would fail to provide a floor if prices were
to decline.

The fourth quarter is usually a strong period for demand in
Asia as consumers in China and India buy for festivals and
weddings. But expectations of a further price drop could keep
some away.

Investor interest in gold also remains weak. SPDR Gold Trust
, the world's top gold-backed exchange-traded fund, said
its holdings fell 1.2 tonnes to 773.45 tonnes on Tuesday - the
lowest since December 2008 and third straight drop.

While the dollar strength has been a major factor in recent
days for the weakness in gold, strong U.S. economic data - which
has fuelled speculation of an earlier-than-expected rate hike -
has also hurt.

Data on Tuesday showed that U.S. manufacturing activity
hovered at a near 4-1/2 year high in September and factory
employment surged, supporting views of s-y economic gro-h
this quarter.

The technical picture also looked bleak for gold, with
traders expecting prices to dip below the key psychological
level of $1,200 an ounce.

PRICES AT 0359 GMT
Metal Last Change Pct chg

Spot gold 1223.4 0.71 0.06
Spot silver 17.76 0.02 0.11
Spot platinum 1331.75 7.35 0.55
Spot palladium 814.25 2.25 0.28
Comex gold 1224.1 2.1 0.17
Comex silver 17.785 0.006 0.03
Euro 1.2857
DXY 84.631

COMEX gold and silver contracts show the
most active months

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)

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