Gold helped lift the UAE's trade with the rest of the world by more than 10 per cent in the first 10 months of last year.
Gold prices helped UAE's trade rise last year
The soaring price of gold helped push up the UAE's trade with the rest of the world by more than 10 per cent in the first 10 months of last year, boosting the country's efforts to reduce its economic reliance on oil revenues.
The yellow metal was the country's number one non-oil export in October and one of the main non-oil exports in the first 10 months of the year, according to data from the Federal Customs Authority (FCA).
Overall non-oil trade rose 11.5 per cent in the first 10 months of last year compared with the same period in 2009.
Non-oil trade advanced to Dh605.4 billion (US$164.82bn) from Dh543.2bn in the same period in 2009.
Exports increased 37.4 per cent to Dh70.3bn, with re-exports reaching Dh143.3bn, a rise of 19 per cent over 2009. Imports rose at a more modest rate of 5.5 per cent to reach Dh391.8bn by October.
After gold, small boats, dredgers and fire-fighting vessels were the second biggest UAE exports in October. The precious metal was also the top-ranked import to the country, followed by diamonds, cars, ornaments and jewellery, respectively. Diamonds, ornaments and jewellery were the leading re-exports.
The trade pickup comes amid signs of rising confidence among small and medium-sized enterprises, according to an HSBC survey.
Improving business sentiment flies in the face of a warning about high unemployment in the MENA region from the UN.
"Companies that are geared towards trade can benefit from stronger growth in Asia where economies are growing at up to twice the GDP of the developed world," said Tudor Allin-Khan, an economist at Alembic HC in Dubai.
Gold prices rose more than 26 per cent last year and surpassed US$1,400 (Dh5,142) an ounce for the first time last month, before falling back to $1,341 an ounce on Friday.
Investors have flocked to the yellow metal as a safe haven from turbulence in the price of the US dollar and other currencies.
As a centre for the refinery and retail of gold, the UAE benefited from the rising demand. It also gained from its status as an important re-exporter.
India, Switzerland, Brazil, Saudi Arabia, Qatar, Iran, Pakistan, Kuwait, China and Oman were the UAE's biggest export markets, respectively, accounting for more than 80 per cent of the country's goods.
India was also one of the main re-export markets, along with Iran, Bahrain, Afghanistan, Iraq, Hong Kong, Saudi Arabia, Qatar, the UK and Kuwait.
Improving trade and rising oil prices helped UAE business confidence jump by the fifth highest in the world in the second half of last year, according to HSBC's bi-annual small business confidence survey. Confidence among SMEs in the MENA region was higher than anywhere else in the world, it found. Saudi Arabian firms were the most upbeat globally.