Gold futures on the COMEX division of the New York Mercantile Exchange falls on Wednesday as traders prepared for the Federal Open Market Committee (FOMC) announcement due after the market's close.

The most active gold contract for April delivery falls 1.9 U.S. dollars, or 0.16 percent, to settle at 1,200.70 dollars per ounce.

All eyes are on the March FOMC meeting where a rate hike is expected. Investors believe the Fed may raise rates from 0.75 to 1.00 during Wednesday's FOMC announcement.

According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is nearly guaranteed, at 95 percent during the March meeting and 88 percent for the May meeting, along with an eight percent chance of an increase to a 1.0 rate.

The U.S. equities markets are expecting the rate hike as well, and the U.S. Dow Jones Industrial Average rose by 47.47 points, or 0.23 percent as of 17:30 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Gold was prevented from falling further as the U.S. Dollar Index fell by 0.31 percent to 101.43 as of 1730 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The precious metal was put under pressure as a report released by the U.S. Department of Labor on Wednesday showed the consumer price index increasing by an as-expected 0.1 percent during the month of February. However, analysts note that the year-on-year rate is up to 2.7 percent, which is in line with the U.S. central bank's desire for 2 percent inflation.

A report released by the U.S. Census Department showed retail sales increasing by an as-expected 0.1 percent during the month of February, with the month of January being revised upward to 0.6 percent, a figure which was better-than-expected. This report put pressure on the precious metal as analysts believe it will likely give the hawks on the Federal Reserve's board more ammunition to advocate for raised rates, which puts pressure on gold.

Traders are waiting for the release of the housing starts report, weekly jobless claims, and Philadelphia Federal Reserve Business Outlook Survey on Thursday, along with the industrial production report on Friday.

Silver for May stayed unchanged at 16.923 dollars per ounce. Platinum for April delivery dropped 2.1 dollars, or 0.22 percent, to close at 936.80 dollars per ounce.