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Gold prices fell to a near two-week low on Thursday, as the dollar and U.S. bond yields climbed after hawkish comments from Federal Reserve Chair Jerome Powell dashed hopes around easing of monetary tightening from December.

Spot gold dropped 0.5% to $1,626.17 per ounce by 0901 GMT, while U.S. gold futures slipped 1.3% to $1,628.30.

"The sentiment in the gold market is clearly negative. In case of continued aggressive tightening, more sentiment-driven and dollar-driven selling remains the biggest risk for gold. Prices could undershoot," said Julius Baer analyst Carsten Menke.

"Considering how bearish the mood in the gold and silver markets already is today, we believe that prices should remain rather rangebound in this scenario –that is between $1,650 and $1,600," Menke added.

The U.S. central bank raised interest rates by 75 basis points on Wednesday and signalled it may be nearing an inflection point.

Bullion rose as much as 1.3% after the release of the Fed policy statement, before ending the session 0.8% lower on Powell's remarks.

Higher U.S. interest rates increase the opportunity cost of holding the non-yielding asset and boosts the dollar.

The dollar was up 1.2% against its rivals, making gold more expensive for other currency holders. Benchmark U.S. 10-year Treasury yields also rose. [USD/] [US/]

Attention now shifts to Friday's U.S. nonfarm payrolls data, which could provide more cues on the resilience of the labour market and Fed rate-hike path.

"For gold bulls hoping for an indication of a pivot or even pause in rate increases by the Fed, this was a disappointment as Powell remains resolutely hawkish," said Ross Norman, an independent analyst.

"That said, seasonality is in favour of good offtake so likely we are nearing a floor for gold soon," Norman added.