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 ✓ UPSC's answer
(d) Statement-I is incorrect but Statement-II is correct

Why the answer is (c)

• Statement-I is correct: Switzerland is the world's largest exporter of gold by value because most of the world's gold is refined there (Valcambi, PAMP, Argor-Heraeus) before being re-exported, chiefly to India and China.

• Statement-II is incorrect: Switzerland's official reserves of about 1,040 tonnes rank around eighth; the largest holders are the United States (8,100 t), Germany, Italy, France, Russia, China and India.

• Its export role comes from refining, not from reserves.

• Hence Statement-I is correct but Statement-II is incorrect, option (c).

Why the other options are wrong

(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation…: Statement-II is wrong: Switzerland does not hold the second-largest reserves.
(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct…: Statement-II is wrong, so both cannot be correct.
(d) Statement-I is incorrect but Statement-II is correct: Statement-I is correct: Switzerland is a top gold exporter.

Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2023, held on 28 May 2023. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.