Why You Should Invest in South African Gold Krugerrands

Gold Krugerrands

If you’re looking for valuable and reliable gold coins for investment reasons, South African gold krugerrands should be at the top of your list.  These 22 karat gold bullion coins are among the most circulated, recognized, and highest minted 1 oz gold coins of all time.  In many respects, they were the model for other one ounce sovereign gold coins that were subsequently produced.

What is the history of Krugerrands?

In 1967, gold krugerrands were presented as an attempt to promote gold in South Africa. They were legalized in the U.S. in 1975 once the prohibition of the ownership of gold coins was lifted, which was first enacted in 1933. In 1978 these coins reached their peak and became the leading gold coins worldwide.  However, they were temporarily banned from being imported in the U.S. from 1984 – 1994 due to apartheid.

Technical Specifications and Facts

The coins are minted from 8.33 percent copper and 22-carat gold (91.67 percent of pure gold) that makes the coins more resistant, harder, and provides them a distinctive rose color appearance.  The only other sovereign gold coins to display a similar appearance are Russian gold roubles.

Gold krugerrands have been minted every year since they were first introduced by the government of South Africa. They’re minted both as proof coins mostly designed for collectors, and bullion coins for investors. Even though both possess the same design, the proof coins are more aesthetically appealing with a mirror-like finish background and a frosted foreground.  They’re produced in lower quantities than their bullion counterparts and are therefore are more valuable.

Design and Sizes

Krugerrands originally were minted as one ounce gold coins, which still remain the highest minted size gold krugerrand to this day.  However, in 1980, fractional sizes were first produced. Now, they’re available as 1 oz., ½ ounce, 1/4 ounce and 1/10-oz. gold coins. Additionally, the coins can be purchased as sets consisting of all four coins.

To this day, the design of the krugerrand remains nearly unchanged. The obverse, or front of the coin, depicts Paul Kruger, South African Republic’s 5th president, and the reverse displays a springbok, the national animal of South Africa. One intriguing fact which distinguishes the Krugerrand from other gold coins is that it doesn’t possess a currency denomination on the coin.

The Popularity of Gold Krugerrands

Nearly 50 million gold krugerrands have been produced since 1967, making them the highest produced modern issued gold coin.  This compares to a mintage of approximately 22 million one ounce Canadian gold maple leaf coins, which were first produced in 1979, and approximately 17 million one ounce American gold eagles, which were first produced in 1986.  Considering that South Africa is among the top three gold producing countries in the world, it’s highly unlikely that Canadian gold maple leaf coins or American gold eagles will equal the production of South African gold krugerrands anytime soon.

Why Choose Popular Gold Coins

As coin collectors, it’s been ingrained in us that the rarer the coin, the better.  However, when it comes to bullion gold coins, it’s exactly the opposite.  When individuals invest in gold coins, they’re not only looking for an investment that will appreciate in the months and years to come, but also an investment that is easy to liquidate.  When it comes to gold bullion coins, it’s best to invest in high mintage and recognizable coins versus the alternative.

While some other gold coins are more rare and are aesthetically stunning, such as some of the gold coins produced by the Isle of Man, these coins are oftentimes more difficult to sell, unless you happen to find a collector that invests in these coins.

What is the Value of a Krugerrand?

With the exception of proof coins, and a couple of low mintage dates, such as 1995, the value of a krugerrand is closely connected to gold’s value. Krugerrands can typically be purchased for the spot price of gold plus a small premium, which is the coin dealer’s commission. Since the value of krugerrands are primarily determined by the spot price of gold, you can monitor the price of gold to determine the ideal time to buy or sell gold krugerrands.

Tony Davis
Tony Davis