Krugerrand is a gold bullion coin produced by the South African Mint. The name krugerrand is a combination of words kruger and rand. The former refers to South African Republic’s first Boer president Paul Kruger featured on the obverse of the coin and the later is the unit of currency in the country. Well known national symbol springbok is depicted on the reverse side of the coin. Coert Steynberg is the creator of this design, which has earlier been featured on the reverse side of South African 5 shilling coin. The coin also features words ‘fine gold’ and ‘South Africa’ in Afrikaans as well as English.
Krugerrand gold coins were introduced in the market for the first time in 1967 with the aim of promoting South African gold. It is one of the most popular gold coins in the world. During 1980s this South African gold coin accounted for about 90 percent of the gold coin market. The popularity of krugerrands was adversely affected during 70s and 80s as several western countries prohibited the import of these gold bullion coins to demonstrate their opposition to the apartheid South African government. Apartheid has long since been abolished and krugerrands have regained popularity among collectors as well as investors.
The South African Mint also produces proof krugerrand gold coins in limited quantities. The main difference between proof coins and uncirculated coins is the number of serrations on their edges. The former has 220 serrations, while there are 180 serrations in the later. In 1997 the 30th anniversary of these South African gold coins was commemorated with a special release of only 30 proof coins in all 4 denominations.
Composition
Unlike most bullion coins, krugerrands were released with the intention of being circulated in the form of currency. This is the reason why they are composed of a wear resistant gold-copper alloy rather than pure gold. The coins contain 91.7% gold and 8.3% copper. This makes krugerrands much more durable than pure gold bullion coins. Compared to crown gold (alloy of gold, copper and silver) coins like American eagle, South African Krugerrands appear to have an orange shade.
Denominations
Krugerrand gold coins are available in different denominations like 1 oz, 1/2 oz, 1/4 oz and 1/10 oz. 1 oz coin contains 2.83 grams copper and 31.1 grams gold. It has an overall weight of 33.93 grams. Until 1980, gold krugerrand coins were manufactured only in 1 oz denomination, but the success of these coins encouraged the South African Mint to produce the coin in smaller denominations. This made the coins available across various price points and increased its affordability.
Investing in Krugerrand Gold Coins
Krugerrand gold coins are the oldest and the most widely owned bullion gold coins. Since their release almost 45 years ago, nearly 50 million ounces of gold coins have been sold to date. Worldwide recognition, portability and liquidity are some of the benefits of investing in krugerrand gold coins. The South African gold bullion coin is offered by all major dealers.
Krugerrand price is determined by the spot price of gold. The spot price of all precious metals including gold is reported every day in radio, newspapers and television. You can also check the spot price of gold on the internet. The price of krugerrand also includes a small premium to cover productions and distribution costs. Compared to the newly minted gold bullion coins, the mark up on krugerrands is smaller because of the significant floating supply of these coins. You can lower the premium on these coins by buying them in bulk.
It was the success of krugerrand gold coins that prompted a number of other gold producing countries to manufacture their own bullion coins for instance, the Royal Canadian Mint started producing Canadian Gold Maple Leaf in 1979 and the United States Mint’s American Gold Eagle was introduced for the first time in 1986. Although today a number of gold bullion coins are available in the market, krugerrands remain a favorite among investors because of their well established record of quality and reliability. Moreover, the content and weight of the coin is guaranteed by the South African government.
With a number of dealers offering gold krugerrand coins online, buying them has become even more simple. All you need to do is find a reliable authorized online dealer. A wide client base, a long standing record of reliability, comprehensive website and the membership of coin grading service providing bodies like Numismatic Guarantee Corporation (NGC) or American Numismatic Association (ANA) are a few indicators of the reliability of an online krugerrand gold coins dealer.