UPSC Prelims 2023 Q86: Current Affairs – Business & Economy
Consider the following statements :
Statement - I : Switzerland is one of the leading exporters of gold in terms of value.
Statement - II : Switzerland has the second largest gold reserves in the world.
Which one of the following is correct in respect of the above statements?
- (a) Both Statement - I and Statement - II are correct and Statement - II is the correct explanation for Statement - I
- (b) Both Statement - I and Statement - II are correct and Statement - II is not the correct explanation for Statement - I
- (c) Statement - I is correct but Statement - II is incorrect
- (d) Statement - I is incorrect but Statement - II is correct
Answer: (c) Statement - I is correct but Statement - II is incorrect
Explanation
Switzerland and gold
| Point | Fact |
|---|---|
| Refining hub | Switzerland refines about two-thirds of the world's gold (Valcambi, PAMP, Argor-Heraeus, Metalor) |
| Exports | One of the largest gold exporters by value — it imports raw gold, refines it and re-exports bars |
| Main buyers | India, China, Hong Kong, the UK |
Statement I — correct.
Largest official gold reserves (approx., World Gold Council):
| Rank | Country |
|---|---|
| 1 | USA — about 8,100 tonnes |
| 2 | Germany — about 3,350 tonnes |
| 3 | Italy |
| 4 | France |
| 5–6 | Russia, China |
| About 7th | Switzerland — about 1,040 tonnes |
Statement II — incorrect. Switzerland is not second; Germany is.
Answer: (c) Statement - I is correct but Statement - II is incorrect.
Why each option is right or wrong
- (a) Incorrect. Statement II is false, so it cannot explain Statement I.
- (b) Incorrect. Statement II is false; Germany holds the second-largest reserves.
- (c) CORRECT. Switzerland is a top gold exporter because it refines gold, but its reserves rank only about seventh.
- (d) Incorrect. Statement I is true; Switzerland is among the top gold exporters by value.
Key point
Switzerland = world's gold refinery and a top exporter; largest reserves: USA, then Germany. Switzerland is about 7th.
Remember
Switzerland is a leading gold exporter, but Germany has the second-largest reserves.
Common mistakes
- Assuming a top exporter must hold big reserves; Swiss exports come from refining imported gold.
- Not knowing that Germany is second after the USA.
- Confusing gold mining leaders (China, Australia, Russia) with reserve holders.
Exam tip
Exports, mining and reserves are three different lists. Don't let one stand in for another.
Sources
- World Gold Council — World official gold holdings
- UN Comtrade — Gold export data