Gold futures on the COMEX division of the New York Mercantile Exchange fell Wednesday ahead of the U.S. Fed's announcement to keep interest rates unchanged.

The most active gold contract for August delivery went down 2.70 U.S. dollars, or 0.22 percent, to settle at 1,249.40 dollars per ounce.

Following the U.S. Federal Reserve's announcement to leave its benchmark interest rates unchanged as expected amid soft inflation, gold prices inched higher in electronic trading.

The central bank also signaled after a two-day meeting on monetary policy that it would begin shrinking its balance sheet "relatively soon."

The U.S. dollar Index rose 0.10 percent to reach 94.18 as of 1708 GMT, and the modest rebound in the dollar undermined gold ahead of the Fed's announcement, said analysts.

Meanwhile, the Dow Jones Industrial Average rose 89.42 points, or 0.41 percent, to 21,702.85 as of 1718 GMT. When equities post gains, the gold futures usually go down, since investors are not necessarily looking for safe haven.

As for other precious metals, silver for September delivery dropped 8.3 cents, or 0.5 percent, to close at 16.459 dollars per ounce. Platinum for October was down 9.1 dollars, or 0.98 percent, to settle at 922.70 dollars per ounce.