Krugerrands

What are Krugerrands?

Krugerrands are gold bullion coins first minted by the Republic of South Africa in 1967 to promote South African gold and enable individuals to own physical gold. They are legal tender in South Africa but were never assigned a rand face value; their market value derives solely from the prevailing price of gold.

Design and composition

• Obverse: portrait of Paul Kruger, former president of the South African Republic.
• Reverse: springbok antelope, a national symbol of South Africa.
• Composition: 22 karat (91.67%) gold with a copper alloy (8.33%) for durability.
• Gold content: contains one troy ounce (31.1035 g) of pure gold.
• Total weight: approximately 33.93 g (about 1.09 troy ounces) due to the copper alloy.

New Krugerrands are issued by the South African Reserve Bank and can be redeemed there. They are widely traded on secondary markets, including the Johannesburg Stock Exchange.

History

• Introduced in 1967 to expand private gold ownership and promote South African gold internationally.
• Became extremely popular with investors during the 1970s and 1980s; by 1980 Krugerrands accounted for roughly 90% of the world’s gold-coin market.
• Faced declining interest in many Western countries during the apartheid era; numerous import bans and economic sanctions were imposed in the 1970s–80s. The United States banned Krugerrand imports in 1985.
• Sanctions were lifted after apartheid ended in 1994, but recovery in some markets was slow because of lingering awareness of prior bans.

Current status

South Africa’s gold production has declined substantially since its peak. Production and coin output have both fallen from their 1970s–80s levels, and the country now accounts for a much smaller share of global gold output. Despite this, Krugerrands remain a recognizable and commonly traded gold coin among investors.

Investing in Krugerrands

Why investors buy them

• Direct, physical exposure to gold (not tied to a company’s performance).
• High liquidity in the global precious‑metals market.
• Durable composition for everyday handling compared with 24‑karat coins.
• Perceived store of value and portfolio diversification, often used as a hedge against currency weakness or inflation.

Risks and considerations

• Price tracks the spot price of gold—value fluctuates with the market.
• Storage and insurance are required for physical coins.
• Be cautious of counterfeit coins and dishonest dealers; use reputable sellers.
• Check tax and sales‑tax rules in your jurisdiction before purchasing.

Practical information

• Where to buy: reputable coin dealers in person or online. All Krugerrands, including coins minted during sanction periods, are now legal to buy and sell.
• Price: closely follows the market price of gold (quoted per troy ounce) plus any dealer premium.
• Storage: secure storage (home safe or third‑party vault) and insurance are recommended.

Key takeaways

• Krugerrands are iconic South African gold coins first minted in 1967; their value is based entirely on gold content.
• Each coin contains one troy ounce (31.1035 g) of pure gold and has a total weight of about 33.93 g due to a copper alloy.
• They dominated the global gold‑coin market in the late 20th century and remain a popular physical gold investment today, though South Africa’s gold production has declined.
• Investors should consider liquidity, storage, dealer reputation, taxes, and price volatility when buying Krugerrands.