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Krugerrands
Buying Krugerrands?
The Krugerrand is a South African gold coin, first
minted in 1967 to help market South African gold. It is produced by
the South African Mint Company.
The Krugerrand was introduced in 1967, as a vehicle for private
ownership of gold. At that time it was illegal for citizens of the
United States to own gold bullion, but legal for them to own foreign
coins.
 The
Krugerrand was issued with legal tender status in South
Africa, and could thus be owned by Americans. It
was actually intended to circulate as currency. Therefore it was
minted in a more durable gold alloy, unlike most other bullion
coins.
An ordinary coin has a fixed legal tender value which is stamped on
its face, which is normally greater than the
bullion value of its
metal. Earlier gold coins such as the British sovereign had a fixed
face value, which was originally more than, and later could be much
less than the bullion value of the gold content.
The Krugerrand has no face value; its legal tender value is the
bullion value of its metal at the current market price of gold. The
Krugerrand was the first bullion coin to have this kind of legal
tender value. It was also the first gold coin to contain precisely
one ounce of fine gold.
Despite the coin's legal tender status, economic sanctions against
South Africa for its policy of apartheid made the Krugerrand an
illegal import in many Western countries during the 1970s and 1980s.
These sanctions ended when South Africa abandoned apartheid in 1994.
When introduced, the Krugerrand was sold at a premium of five
percent over its bullion value.
South Africa
introduced the Krugerrand in 1967 to cater to this market; this was
the reason for its convenient and memorable gold content—exactly one
troy ounce. It was the first modern, low premium (i.e. priced only
slightly above the bullion value of the gold) bullion gold coin.
By 1980 the Krugerrand accounted for 90% of the gold coin market.
The success of the Krugerrand led to many other gold-producing
nations minting their own bullion coins, such as the Canadian Gold
Maple Leaf in 1979, the Australian Nugget in 1981, the British
Britannia coin in 1987 and the American Gold Eagle in 1986.
In 1980, three smaller coins were introduced, with a half ounce,
quarter ounce, and tenth ounce of gold.
Through 2008, Krugerrand coins containing 46 million ounces of gold
have been sold.
Properties of
Krugerrands
Their gold content is exactly one troy ounce.The
Krugerrand is 32.6 mm in diameter and 2.74 mm thick. The
Krugerrand's actual weight is 1.0909 troy ounces (33.93 g). It is
minted from gold alloy that is 91.67% pure (22 karats), so the coin
contains one troy ounce (31.1035 g) of gold. The remaining 8.33% of
the coin's weight (2.826 g) is copper (an alloy known historically
as crown gold which has long been used for English gold sovereigns),
which gives the Krugerrand a more orange appearance than
silver-alloyed gold coins. Gold alloy coins are harder and more
durable, so they can resist scratches and dents.
The Krugerrand is so named because the obverse bears the face of
Boer statesman Paul Kruger, four-term president of the old South
African Republic. The reverse depicts a springbok, one of the
national symbols of South Africa. The image was designed by Coert
Steynberg, and was previously used on the reverse of the earlier
South African five shilling coin. The name "South Africa" and the
gold content are inscribed in both Afrikaans and English.
The word "Krugerrand" is a registered trade mark owned by Rand
Refinery Limited, of Germiston, South Africa.
Proof Krugerrands
The South African Mint Company produces limited edition proof
Krugerrands intended as collector's items. These coins are priced
above bullion value, although non-proof Krugerrands also have a
premium above gold bullion value. They can be distinguished from the
bullion Krugerrands by the number of serrations on the edge of the
coin. Proof coins have 220 while bullion coins have 180.
Learn
about: The Gold Standard
PLEASE SEEK
PROFESSIONAL ADVICE BEFORE YOU BUY OR SELL GOLD, SILVER & COINS.
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