Why should you invest in the South African Gold or Silver Krugerrand?
In the world of precious metal coins, few coins are as recognizable as the South African Krugerrand. This 1-ounce coin—available in both gold and silver—has a long history and an iconic design that’s well-known throughout the world.
Here are some of the important facts all coin collectors and precious metal investors should know about the South African Krugerrand.
History Of The Krugerrand
The Krugerrand has been minted since 1967. The classic coin was unique for its time in that it was first introduced as a gold coin long after most developed nations had phased out their widespread minting of gold. In South Africa, however, economic conditions were improved by the circulation of gold into private hands, leading the Krugerrand to be an overwhelming success as a currency.
The original coin was not pure gold. It had a balance of about 92 percent gold and 8 percent copper to give it more durability than a coin minted from pure gold.
Since it was first introduced, the Gold Krugerrand has become one of the most popular gold coins in the world. A massive surge in gold investment in the 1980s brought the South African coin to prominence among modern investors.
During the ‘70s and ‘80s, millions of Krugerrands were exported from South Africa to investors in America and other countries, almost instantly turning the Krugerrand into a permanent fixture in the global gold investment marketplace.
In 2017, the South African government also introduced a .999 Silver Krugerrand in honor of the coin’s 50th anniversary. Though still quite new, the Silver Krugerrand has already become very popular among silver investors.
In fact, the 2018 Silver Krugerrand was recently released and it appears that the silver version of the coin will be a permanent fixture in the bullion offerings from South Africa going forward.
The Krugerrand As An Economic Experiment
One fascinating aspect of the South African Krugerrand is the fact that the coin, despite technically being legal tender in the country, has no face value attached to it. Instead, the value of the Krugerrand is determined by the spot price of the precious metal it contains at any given time.
This unique fact renders the Krugerrand largely immune to the kind of currency market fluctuations that affect almost every other form of legal tender in the world today. In a sense, the Gold Krugerrand is an example of a gold standard currency in its purest form.
The obverse side of the Krugerrand features a left-facing profile of Paul Kruger, who was the president of the South African Republic from 1883 until 1900. Kruger was a Boer, or South African resident of Dutch descent.
In his capacity as president, Kruger became a major figure in the Dutch opposition to British influence in South Africa. Despite a controversial legacy, Kruger remains one of the most prominent figures in the history of modern South Africa. It is, of course, from the depiction of Kruger that the Krugerrand takes part of its name. The second part of its name is derived directly from the word “rand,” which is the name of South Africa’s currency.
On the reverse of the coin, a springbok antelope, the national animal of South Africa, is depicted.
Where Are Krugerrands Minted?
The South African Mint produces Krugerrands at its primary facility in Centurion, which is near the better-known city of Pretoria in Gauteng Province. It is interesting to note, though, that the Krugerrand has inspired many replica rounds manufactured by private companies. Many of these replica rounds are virtually identical to the real Krugerrand, making them difficult to tell apart. For this reason, it’s critical that precious metal investors who want to buy Krugerrands work with a trusted supplier to ensure they are getting the genuine article.
In addition to the traditional 1-ounce Gold Krugerrand and Silver Krugerrand, there are also fractional variations that contain smaller amounts of gold. These smaller versions of the coin come in half-ounce, quarter-ounce, and tenth-ounce weights. The availability of these fractional versions is great for investors who may not have huge amounts of capital to put into precious metals, as they trade for proportionately lower prices.
How Much Is A Krugerrand Worth?
Because the Krugerrand’s value fluctuates with the price of gold and silver, it can be a bit difficult to keep track of the value that this coin has at any given time. At the time of this writing, the value of a Gold Krugerrand stands at roughly $1,222 USD per 1-oz. coin. However, this value changes on a day-to-day basis in direct relation with the spot price of gold.
If you’re a precious metal investor, Krugerrand coins can make an excellent addition to your portfolio. Investors all over the world have found the Krugerrand to be a reliable and stable store of value. Consider adding the brand-new 2018 Silver Krugerrand and the classic Gold Krugerrand to your portfolio today!