Q. Which of the following statements accurately describe the reasons behind the recent spike in gold prices in India?
1.Global economic uncertainty due to U.S. tariffs has increased demand for gold as a safe-haven asset.
2.Strengthening of U.S. dollar has driven businesses to invest in gold.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation: Only Statement 1 is correct
Statement 1 is correct: Tariffs imposed by U.S. – Experts attribute the global economic uncertainty caused by the tariffs imposed by US as the primary reason behind the recent spike in gold prices.
Statement 2 is incorrect: A weaker U.S. dollar generally leads to higher gold prices. This is because gold is typically priced in U.S. dollars, and when the dollar weakens, it becomes cheaper for buyers holding other currencies, increasing demand and pushing up prices.
Source: BL
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