The Krugerrand

Investing in the KrugerrandThe Gold Krugerrand was initially introduced as a means to allow private ownership of gold.

This acted as a way of protecting individuals against inflation and the volatility of fiat currencies and it was quickly adopted by investors when it was introduced.

Being a well known coin and a full Krugerrand containing exactly one ounce of pure gold, it is also one of the most widely used and traded coin across the world, it is also of course made in South Africa from gold from the South African gold mines.

Investors buy Krugerrands as a form of liquid exposure to gold.

History & Specifications

The name of the coin comes from the combination of the name of then president Paul Kruger, and their monetary currency known as the “rand” which then became Krugerrand.

Originally, it came only in one size weighing about 31.103 grams which contains exactly 1ounce of pure gold, but over time other smaller sizes have been introduced to allow investors more flexibility.

Currently, you can own any of the other three different sizes of Krugerrand coins which contain 1/2 ounce, 1/4 ounce and 1/10 ounce of gold respectively, meaning that you have four different sizes that you can buy or sell depending on your preference.

Even with different sizes, the design and appearance are similar. It has been noted that the fractional ounce Krugerrands are however not as readily available in the market as compared to the 1-ounce coin with 22-karat gold.

The value of the Krugerrand is not indicated on either of its sides as with say a British pound or American Dollar (but of course with a gold coin this is not the purpose, to have a fixed value).

The value of any gold coin varies over time and is directly tied to the current gold price. So if for example you bought a Krugerrand today it may cost you say $1000, but if the price of gold continues to climb then in 12 months time the same coin might now have a value of say $1500.

It could of course go in the opposite direction if the gold price were to fall instead.

This is why you need to look at the prevailing value of the gold every time you want to trade any gold coin. To a large degree both buying or selling gold coins is a form of speculation, your are guessing whether the value of gold will increase or decrease, and this is based largely on the prevailing economic conditions and outlook.

In an effort to make them more durable, the Krugerrand has been created with a combination of 91.7% gold and 8.3% copper. This is a common practice since pure gold is soft that it is easily scratched and the coin damaged.

This results in a coin that contains 1 ounce of pure 24 ct gold, but the overall coin is 22ct because of the added copper.

Characteristics of the Gold Krugerrand

One side highlights the then president, Paul Krugger. In addition, this side also indicates the name of the country it originated from “South Africa”. The name is written twice in two languages which represents the country’s two native languages (English and Afrikaans).

Its opposite side features the picture of a springbok antelope. It also holds the year in which the coin was issued as well as the fineness of the coin.

It has a diameter of 32.6mm; it is 2.74mm thick with 22 karat fitness.

These characteristics are standard for this type of coin and help you to identify a genuine Krugerrand and determine if what you are trying to buy is real or fake. This being an investment, you must also be very careful of how much you choose to pay.

How to sell and buy Krugerrands

With the advancement in technology, you can now trade your gold coins from various outlets including online.

Before you can decide where to sell or buy Krugerrands, it is important that you shop around and look at the different stakeholders and the value they are willing to offer. Different companies have different factors they put into consideration when considering buying or selling of gold Krugerrands. You will notice a difference in:

  • The minimum order they are willing to trade
  • The price they are willing to offer whether you are buying or selling

Prices change all the time and perfect timing is almost impossible as you need to constantly view the rates being offered. The rates can be viewed online live which means that you can monitor them at any time.

Just as in any other investment market, you can decide on what you think are the best rates and time that are suitable to either sell or buy.

Though the full ounce version is bigger than many other coins, it definitely still offers the qualities of liquidity and portability when compared to bullion bars or other methods of holding gold.

A Gold Krugerrand is one sure way of making an investment knowing that it is safe and it can make returns anywhere across the world therefore not limiting you on regions of investment.