Krugerrand

3 key takeaways

• The Krugerrand is one of the most popular and widely traded gold bullion coins in the world.
• It was introduced in 1967 by the South African Mint to promote private ownership of gold.
• The coin’s value is based on the current price of gold, making it a preferred choice for investors.

What is the Krugerrand?

The Krugerrand is a gold coin from South Africa that contains one troy ounce of fine gold. It was first minted in 1967 by the South African Mint in collaboration with the Rand Refinery. The coin was named after Paul Kruger, a former President of the South African Republic, and the Rand, the South African unit of currency.

The Krugerrand was created to encourage private ownership of gold and to facilitate the sale of South African gold. Unlike many other gold bullion coins, the Krugerrand was intended to be used as currency and has legal tender status, although its face value is not inscribed on the coin.

Design and composition

The obverse side of the Krugerrand features a portrait of Paul Kruger, designed by Otto Schultz, while the reverse depicts a springbok antelope, a national symbol of South Africa, designed by Coert Steynberg. The coin is composed of 22-karat gold, making it 91.67% pure, with the remainder being copper to enhance durability.

The Krugerrand comes in four sizes:

• 1 oz (one troy ounce)
• 1/2 oz
• 1/4 oz
• 1/10 oz

Each coin’s weight includes the additional copper, so the 1 oz Krugerrand actually weighs about 1.09 troy ounces.

Popularity and investment

The Krugerrand quickly became one of the most popular gold coins for investors due to its widespread availability and status as a legal tender coin. It was the first gold coin to be marketed specifically for investment purposes, making gold accessible to private individuals around the world. During the 1970s and 1980s, the Krugerrand dominated the gold coin market, accounting for nearly 90% of the global gold coin market by 1980.

Investors favor the Krugerrand for several reasons:

• Liquidity: It is highly recognizable and can be easily bought and sold in global markets.
• Durability: The copper content makes it more resistant to scratches and damage compared to pure gold coins.
• Value: Its value is directly tied to the current price of gold, providing a reliable store of value and hedge against inflation.

Legal and historical significance

During the 1970s and 1980s, the Krugerrand was subject to international boycotts due to South Africa’s apartheid policies. Many Western countries banned the import of Krugerrands as part of sanctions against South Africa. Despite these challenges, the coin remained popular and continued to be a significant tool for private gold ownership.

With the end of apartheid in the early 1990s, many of these sanctions were lifted, and the Krugerrand regained its position in the global market. Today, it continues to be a popular choice for investors looking to add gold to their portfolios.

Related topics

• Gold bullion: Learn about other forms of gold investment, including bars and other bullion coins.
• Precious metals investment: Understand the benefits and risks of investing in gold, silver, and other precious metals.
• Global gold market: Explore how gold is traded worldwide and the factors that influence its price.

The Krugerrand remains an iconic and widely recognized gold coin, offering investors a tangible and valuable asset. To learn more about gold investment and the global gold market, explore the related topics mentioned.