Investors who buy gold coins often add at least one South African Krugerrand to their collection. This gold coin of South Africa began being minted by the South African Mint Company in 1967. Its introduction was a method to encourage private ownership of gold. Since it was originally intended to be used as currency, it is made from a gold alloy that is more durable than that found in other bullion coins.
When apartheid was still being practiced in the country, economic sanctions resulted in this coin being classified as an illegal import in most of the Western world. In 1994, South Africa abandoned the practice of apartheid and the coin became eligible for import. Sales of this coin have been very successful and in 1980, it represented 90 percent of the market for gold coins. As of 2008, 46 million ounces of gold were sold in the form of South African Krugerrands. Other countries such as Australia, Britain, Canada, and the U.S. followed South Africa’s lead and developed their own gold bullion coins.
The standard Krugerrand is one ounce of gold but in 1980, coins in half, quarter, and tenth ounce sizes began being minted. The one-ounce coin is minted from 91.67 percent pure gold alloy, the equivalent of 22 karats. In addition to the one troy ounce of gold contained in the coin, the other component is copper. This provides the coin with a color that is more orange than gold coins that contain silver alloy. The copper also makes the coin more durable and harder, enabling it to better resist dents and scratches.
The Krugerrand takes its name from Paul Kruger who served as the four-term President of South Africa’s former Republic. The face of the former President is on the front of the coin and an image of the national symbol the springbok is on the reverse. The term “Krugerrand” is actually a registered trademark under ownership of the Rand Refinery Limited based in Germiston, South Africa.
An investor who would like to buy gold coins should make a point to purchase a South African Krugerrand. There are limited edition proof versions of the coin available from the South African Mint Company. These are offered at a cost higher than gold bullion value but the non-proof version can also sell for a price higher than the value of gold.
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