July 12, 2009 – South African Krugerrands

We’ve discussed the South African Krugerrand in some detail before, but it’s really an interesting coin and it deserves a deeper look.

The first of these coins were minted back in 1967 in an effort to pick up sales for South African gold, issuing the one-ounce bullion coin. While American Eagles are offered for a variety of reasons, the South African Krugerrand has a single purpose in mind: To sell South African gold.

In the beginning, the only size offered was the one-ounce coin, a full troy ounce of fine gold. This was known as a “Kruger”. It was in 1980 when the makers of the Kruger realized that there was a market for smaller coins, as well, and they begin offering them in three more sizes: The half ounce, the quarter, and the tenth ounce. After this point, the one-ounce South African Krugerrand began going by the name of the “full”, or the “one ounce”.

The Krugerrands are currently quite popular in England, but it’s interesting to note that they were virtually unknown to all of Britain until 1971, as it was illegal for the British to acquire gold bullion coins.

It’s interesting to note that the South African Krugerrand was never intended to be a pretty coin. “Handsome” may be a fair word, but the actual design was only intended to indicate the value. As such, it may not be as “pretty” as the American Eagle, but it has a distinct charm all its own.

It’s also interesting to note that there is simply no such thing as a silver South African Krugerrand. If you go on EBay, you’ll find a few coins being marketed as such. Now, while these coins are, generally, real silver, they are not real Krugerrands. That doesn’t mean they’re worthless, just that they’re not certified.

The South African Krugerrands are not, in fact, actual “legal tender”. They are money, in that they are gold and, well, gold is money and that’s that, but, their markings bear simply their weight in gold. The coins are actually produced by a private company, the South African Mint, and as such cannot be considered actual legal tender. This sets them apart from the government-minted Maple Leafs and American Eagles.

That said, if you simply want to invest in gold, then the simple fact is that gold is gold. Whether a South African Krugerrand, a Buffalo Dollar, or just a chunk of metal with “1 oz.” marked on it, it’s all the same stuff. Krugerrands are just as safe and reliable an option as any other investor grade coin.

Most American investors may opt to stick to American coins, but with these shortages of 22 karat blanks at the US Mint, there’s no telling when they’ll get back on track and end the suspension on gold investor coins. As such… well, like we said: It’s still gold. Whether it has Lady Liberty, a Maple Leaf, or Paul Kruger on the obverse, the metal content is the same.

Linda Hess

Jul 12, 2009

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