By Ed Ballard and Stephanie Yang

Gold prices pared losses Wednesday after the Federal Reserve gave little indication of when it plans to raise interest rates this year.

Gold for April delivery was recently near flat at $1,211.30 a troy ounce in electronic trading. Prices settled down 0.3% at $1,208.30 an ounce on the Comex division of the New York Mercantile Exchange.

The Fed said it plans to gradually raise short-term interest rates, but didn't provide further guidance from December, when officials indicated that they may raise rates as many as three times in 2017.

"The most positive thing you could say for gold is there was no rate rise," said James Steel, chief precious metals analyst at HSBC Securities in New York. While gold prices have fallen on expectations for further rate increases this year, "the market is already assuming some rate rises" are priced in, he said.

Higher rates tend to hurt gold, which struggles to compete with yield-bearing assets when borrowing costs rise.

Fed officials also noted signs of economic strength after the policy meeting.

Earlier Wednesday, the precious metal came under pressure and positive employment data in the U.S.

Private payrolls rose by 246,000 in January, data showed, exceeding economist expectations of 164,000. The show of strength in the private-hiring sector helped boost optimism over economic growth in the U.S., diminishing demand for safe-haven gold.

The U.S. dollar also gained, making dollar-denominated gold more expensive for other currency holders. The WSJ Dollar Indexwas up 0.1% at 90.54, paring some gains after the Fed meeting.

The move lower Wednesday broke a two-day winning streak for gold prices. Analysts have attributed the strength in recent days to uncertainty generated by the busy start to the Trump presidency. Commerzbank highlighted allegations made by President Donald Trump and his economic adviser Peter Navarro on Tuesday that Germany and Japan are benefiting from currency manipulation.

"The U.S. dollar depreciated noticeably in response, increasing demand for gold as a safe haven -- presumably out of fears of a possible currency war," the bank wrote.

Write to Ed Ballard at ed.ballard@wsj.com and Stephanie Yang at stephanie.yang@wsj.com

(END) Dow Jones Newswires

February 01, 2017 15:33 ET (20:33 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.