Gold prices in the United Arab Emirates fell below Dh500 per gram on Wednesday as rising crude oil prices fueled inflation concerns and uncertainty over the US Federal Reserve’s upcoming interest rate decision. Spot gold traded near $4,140 an ounce following a nearly 1 percent drop in the previous session.

US West Texas Intermediate (WTI) crude surged 5.7 percent to $109.60 a barrel, while Brent crude increased 2 percent to $111.69 amid escalating tensions in the Middle East that have raised fears of tightening global oil supplies. The spike in oil prices comes amid attacks on Gulf shipping and renewed confrontations involving Iran, which issued a warning asserting it had "no choice" but to enforce control over the strategically important Strait of Hormuz.

The escalation in oil prices has heightened concerns about rising energy costs, which could drive inflation higher and complicate the Federal Reserve’s deliberations on future interest rate moves. These inflationary pressures have also placed downward pressure on gold, traditionally seen as a hedge against inflation.

In the UAE, gold prices eased by Dh2 overnight, providing modest relief to consumers, including those celebrating the festival of Dussehra. Dubai’s 24-karat gold fell to Dh497 per gram, slipping below the Dh500 mark. Meanwhile, 22-karat gold traded at Dh460 per gram, with 18-karat and 14-karat varieties priced at Dh378 and Dh295 per gram, respectively.

The decline in gold prices comes as buyers in the UAE take advantage of lower rates amid regional geopolitical uncertainty and rising energy costs, which continue to influence commodity markets globally.