Krugerrand

The face of Paul Kruger, shown on the obverse side of the coin.

The Krugerrand is a South African gold coin, first minted in 1967 to help market South African gold. It is produced by the South African Mint Company.

History

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, unlike most other bullion coins.

An ordinary coin has a fixed legal tender value which is stamped on its face, which is normally greater than the bullion value of its metal. Earlier gold coins such as the British sovereign had a fixed face value, which was originally more than, and later could be much less than the bullion value of the gold content.^{[citation needed]}

The Krugerrand has no face value; its legal tender value is the bullion value of its metal at the current market price of gold. The Krugerrand was the first bullion coin to have this kind of legal tender value. It was also the first gold coin to contain precisely one troy ounce of fine gold.^{[citation needed]}

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.

When introduced, the Krugerrand was sold at a premium of five percent over its bullion value.^{[citation needed]}

By 1980 the Krugerrand accounted for 90% of the gold coin market.^[1] 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.

In 1980, three smaller coins were introduced, with a half ounce, quarter ounce, and tenth ounce of gold.^{[citation needed]}

Through 2008, Krugerrand coins containing 46 million ounces of gold have been sold.^[2]

Properties

Krugerrands: Their gold content is exactly one troy ounce.

The Krugerrand is 32.6 mm in diameter and 2.74 mm thick. The Krugerrand's actual weight is 1.0909 troy ounces (33.93 g). It is minted from gold alloy that is 91.67% pure (22 karats), so the coin contains one troy ounce (31.1035 g) of gold. The remaining 8.33% of the coin's weight (2.826 g) is copper (an alloy known historically as crown gold which has long been used for English gold sovereigns), which gives the Krugerrand a more orange appearance than silver-alloyed gold coins. Gold alloy coins are harder and more durable, so they can resist scratches and dents.

The Krugerrand is so named because the obverse bears the face of Boer statesman Paul Kruger, four-term president of the old South African Republic. The reverse depicts a springbok, one of the national symbols of South Africa. The image was designed by Coert Steynberg, and was previously used on the reverse of the earlier South African five shilling coin. The name "South Africa" and the gold content are inscribed in both Afrikaans and English (as can be seen on the pictures of the coin).

The word "Krugerrand" is a registered trade mark owned by Rand Refinery Limited, of Germiston, South Africa.

Proof Krugerrands

Krugerrands are a popular way to invest in gold.

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.^[3]

Silver "Krugerrand"

The Krugerrand is minted in gold for historical reasons. According to the "Tax Free Gold" website, there is no such a thing as a silver Krugerrand. Such coins "are not official, have no legal tender value, are not produced or sanctioned by the South Africa Mint or Government, not Krugerrands, and not even coins."^[4]

References

This article includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (October 2009)

• Rand Refinery Krugerrand page
• Brochure from the Rand Refinery & MintPDF (999 KB)

External links

Wikimedia Commons has media related to: Krugerrand

Numismatics portal

• Kruggerrand Coin Image Gallery
• The South African Mint