Krugerrand – The original Bullion Coin

Krug obverse

Krugerrand- the first bullion coin obverse

The South African Chamber of Mines had an inspired idea to help market South African gold. It was to issue a one ounce bullion coin, to be sold at a very low premium over the intrinsic gold value. The Krugerrand was introduced in 1967, as a vehicle for private ownership of gold. It was actually intended to circulate as currency. Therefore it was minted in a more durable gold alloy ( the same as the British Sovereign), unlike most other bullion coins and contained 2.826gms of copper  to resist scratching and gives the coin its golden hue. The Krugerrand was the only accessible gold investment opportunity for the everyday buyer, it was the first coin to contain exactly one troy ounce of gold, and was intended from its inception to provide a way for the private investor to purchase gold.

Despite the coin’s legal tender status, economic sanctions against South Africa for its policy of apartheid made the Krugerrand an illegal import in many Western countries during the 1970s and 1980s. These sanctions ended when South Africa abandoned apartheid in 1994, the krugerrand once again regained it status as one of the worlds leading bullion coins

Originally only one size was issued, which contained one full troy ounce (31.1035 grams) of fine gold. This was originally known as a Krugerrand, or Kruger, for short. From 1980, three other sizes were introduced, namely a half, quarter, and tenth ounce size. The Krugerrand derives its name from combining the names of Paul Kruger, a well-known Boer leader and local hero who went on to become the last president of the Republic of South Africa, and the “rand” – the monetary unit of South Africa. The obverse side of the coin is detailed with a profiled bust of President Paul Kruger and features the name of the country, “South Africa,” in the country’s two native languages, English and Afrikaans. The reverse side of the coin features the image of a springbok antelope, one of the national symbols of South Africa.

By 1980 the Krugerrand accounted for 90% of the gold coin market. Although not a beautiful coin, many millions have been sold since its introduction as the 1 oz coin can be purchased at very little premium over gold bars. The success of the Krugerrand led to many other gold-producing nations minting their own bullion coins, such as the Canadian Gold Maple Leaf in 1979, the Australian Nugget in 1981, the British Britannia coin in 1987 and the American Gold Eagle in 1986.

Krug spec

The South African Mint Company produces limited edition proof Krugerrands intended as collector’s items. These coins are priced above bullion value, although non-proof Krugerrands also have a premium above gold bullion value. They can be distinguished from the bullion Krugerrands by the number of serrations on the edge of the coin. Proof coins have 220 while bullion coins have 180.

Maurice Hall

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