South African Gold Krugerrand Coins
South African Gold Krugerrands are among the most prized gold coins in the world at the present time, and as such are an excellent investment for anyone interested in gold. Their value includes a premium above the price of the constituent gold itself, which makes them collectible as well as a store of value in gold bullion form. Gold is the only metal which is completely immune to tarnishing or corrosion regardless of the circumstances it is left in, and this, plus its beauty and rarity, are guarantees of its continued value.
Buying Krugerrands can focus either on uncirculated bullion coins, or on proofs. Proofs naturally have a higher premium over bullion coins due to their rarity, though their bullion value is identical. You should consider your intent when you decide which Krugerrands to buy. If you are looking for bullion as a hedge against inflation, then uncirculated bullion is your best choice.
If you seek to make a profit by buying gold and then reselling it at a later date, however, proofs are your more valuable choice. The South African Mint website (which, given the profitability of their sales, is superbly up to date) lists suppliers who sell Krugerrands throughout the world, with a different page for each region, such as North America, Europe, and Asia. Finding an authorized dealer through the contacts provided on these pages is your best bet for acquiring Krugerrands smoothly and easily.
Properties of the Gold Krugerrand
Gold Krugerrands come in four basic sizes – 1/10 ounce, ¼ ounce, ½ ounce, and 1 ounce. In all cases, the coins are actually somewhat heavier than their listed weight. This is because 22 carat gold is used in the minting of these coins, which is gold composed of 91.67% pure gold and 8.33% copper.
The coins are 8.33% heavier than their notional weight, so that the actual weight of gold in each will correspond to the theoretical weight. For example, a one ounce gold Krugerrand actually weighs in at 33.93 grams, with an actual gold weight of 31.103 grams, or precisely one troy ounce. The balance of the weight is made up by the copper component.
The copper, as noted above, was alloyed with the gold in order to make a tough, lasting coinage that could be used as real money in everyday transactions when Krugerrands were first issued. This has been continued, making these among the most resilient gold bullion coins in the world, as well as explaining their extraordinary richness of tone and nearly pumpkin-colored sheen.
The diameter of these coins differs according to their weight, as, naturally enough, does their thickness. The one ounce coins are the largest, at 1.31 inches (32.77 mm) wide and 0.11 inches (2.84 mm) thick. The smallest are the 1/10 ounce coins, which are only 0.66 inches (16.55 mm) in diameter and 0.54 inches (1.35 mm) thick.
All sizes have reeded edges, and an examination of the number of grooves in the reeding can tell you whether the coin you are looking at is bullion coin or a proof. Bullion coins have 115, 150, 185, or 160 grooves in their rim, while proofs have more. The extra reeding grooves are numerous, since a proof 1 ounce has 220 grooves rather than the usual 160, so to the practiced eye it is not even necessary to count them in order to determine which type of coin you are looking at.
The design on the coin remains the same from year to year, with the obverse showing the blocky, bearded head of Paul Kruger, the first South African president to oversee the striking of a national currency. This effigy is flanked by the words “Suid-Afrika South Africa”. The reverse of the coin depicts a prancing Springbok antelope, with the words “Krugerrand” and “Fyngoud 1 Oz Fine Gold”, as well as the date flanking the Springbok with two digits on each side of the beast’s image.
History of the Gold Krugerrand
Unlike the American Silver Eagle – which was created to help fund the creation of an ultramodern arsenal during the latter end of the Cold War – or the Canadian Silver Maple Leaf – which was created purely to cash in on the public’s growing hunger for precious metals – the Gold Krugerrand was minted in 1967 in order to serve as an actual legal currency for transactions in South Africa. This is the primary example of a modern state’s attempt to adopt a precious metal standard for everyday currency in their nation.
This fact helped to determine the composition of the Krugerrand. Gold is typically alloyed either with copper or silver. The Krugerrand’s designers opted for copper because it makes a coin tough and resistant to both slow wear and rapid, accidental marring. The weight of the gold was carefully calculated to remain at one ounce despite this alloying, however, as explained below.
The Western nations made it a crime for their citizens to own Krugerrands because of their political clash with South Africa, but the Krugerrand became extremely popular among all those nations with less squeamish principles. The Krugerrand ousted most other coinage from the global precious metal market, controlling a nine tenths share by 1980, and this prompted the other governments to mint their own gold, and eventually, silver coins. The American Eagle, the Canadian Silver Maple Leaf, the Mexican Libertad, and many others can be seen as an effort to compete with the Krugerrand’s mastery over the world gold bullion coin market, and cash in on the rich rewards to be gained there.
When Apartheid ended in 1994, the Krugerrand became a coin that it was legal to purchase and own again in the United States and other western powers, and became immensely popular in these areas as well. Its mintage continues to this day, with new coins released annually and no sign of diminishing popularity. The coin is still minted with its original imagery and metallurgical content, meaning it is not a highly varied coin, but one which practically oozes with solidity and dependability.
