* Spot gold may fall to $1,303/oz - technicals
* Dollar index rises to highest since Feb. 9
* Fed's Powell strikes hawkish tone
(Recasts, updates prices; adds comment, NEW YORK to dateline)
By Renita D. Young and Maytaal Angel
NEW YORK/LONDON, Feb 28 (Reuters) - Gold prices steadied on Wednesday after the previous session's more than 1 percent fall following comments by the Federal Reserve's new chairman that fueled views the U.S. central bank would raise rates four times this year rather than three.
The dollar hit a five-week high versus a basket of currencies, lifted by Fed Chairman Jerome Powell's upbeat assessment of the U.S. economy on Tuesday. A strong dollar makes dollar-priced gold costlier for investors using other currencies.
Spot gold was flat at $1,317.94 per ounce by 1:34 p.m. EST (1834 GMT) and was poised to close February down 2 percent. On Tuesday, it hit the lowest since Feb. 9 at $1,313.26.
U.S. gold futures settled down 70 cents or 0.1 percent, at $1,317.90 per ounce.
"Even though the dollar is stronger and Treasury yields are higher, the gold market oversold itself yesterday, and now we're recovering a bit," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
Powell noted in his speech that recent data had strengthened his confidence that inflation will rise. .
Inflation generally supports gold, which is considered a safe store of value when price pressures rise. But raising interest rates to fight inflation makes the non-yielding metal less attractive.
World stocks tumbled as dismal Chinese and Japanese manufacturing and industrial output data added to the bearish equities sentiment sparked by the U.S. interest rate hike views after Powell's comments. Elevated U.S. debt levels and volatility in stocks could boost gold prices above $1,400 longer-term, according to a Reuters survey of analysts. Spot gold is expected to break support at $1,317 per ounce and fall to the next support level at $1,303, as suggested by its wave pattern and a projection analysis, Reuters technical analyst Wang Tao said. "People are looking to buy gold on dips, so I think it will be supported down at $1,300," a Hong Kong-based trader said.
Silver lost 0.2 percent to $16.39 an ounce, close to a 5.2 percent monthly decline. Palladium rose 0.8 percent at $1,043.70, but headed for a 2 percent monthly drop. Platinum was flat $983.10 per ounce, after dropping to a two-week low of $972.50, declining 2 percent for the month.
(Additional reporting by Eileen Soreng and Nithin Prasad Editing by Dale Hudson, Mark Potter and Susan Thomas)
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