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Gold prices reversed course and edged lower on Wednesday after the Federal Reserve Chair Jerome Powell pushed back strongly against expectations of a U.S. rate cut by March.

Spot gold eased 0.1% at $2,034.37 per ounce by 03:10 p.m. ET (2010 GMT) after rising as much as 1% earlier in the session. Bullion was down 1.3% this month but have held above the $2,000 per ounce psychological level so far this year.

U.S. gold futures settled 0.8% higher at $2067.4.

The U.S. central bank left interest rates unchanged but Powell knocked down the idea the Fed could cut rates in the spring, which many market participants have been expecting.

Powell sounded some dovish notes but the key comment is "not March", which should keep the rate-cut hounds at bay for now, said Tai Wong, a New York-based independent metals analyst.

Gold has really been fairly bulletproof, but incoming data will be heavily parsed, Wong added.

Bullion is considered a hedge against inflation and economic uncertainties but higher rates increase the opportunity cost of holding the non-yielding asset.

Traders trimmed bets on March start to U.S. rate cuts, and now see a May start as about as likely.

The dollar index pared losses while benchmark 10-year U.S. Treasury yields fell to near 3-week lows after Fed verdict. [USD/] [US/]

Strong physical and central bank demand for gold will continue, said Daniel Ghali, commodity strategist at TD Securities.

Data showed U.S. private payrolls rose far less than expected in January. Investors also took stock of news the New York Community Bancorp cut its dividend and posted a surprise loss, renewing fears over the health of similar lenders.

Spot silver prices fell 1.2% to $22.88 per ounce, platinum eased 0.4% at $917.20, while palladium gained 0.3% at $979.31. All three metals were poised for monthly declines.