The global gold coin market is a great opportunity for those seeking a reliable investment. However, there are a lot of ways to put your investment funds into gold coins. South African Krugerrand gold coins are a great choice, as they are reliable assets that have grown in popularity.
Before you invest your money, you should understand the ins and outs of your purchase. How much value do gold Krugerrands possess, and can they make a positive difference in your checkbook?
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What Will I Learn?
- What Is a South African Gold Krugerrand?
- Are Krugerrands Produced Only by the South African Mint?
- What Is the History of Gold Krugerrand Coins?
- What Is the Value of a Gold Krugerrand Coin?
- What Is the Krugerrand Value By Year?
- Is the South African Gold Krugerrand Coin Growing in Popularity?
- Should You Invest in Krugerrand Gold Coins?
- What Are the Pros and Cons of Investing in Gold Krugerrand Coins?
- Conclusion: Understanding the Worth of Gold Krugerrand Coins
What Is a South African Gold Krugerrand?
Krugerrand coins were first minted in 1967 in the South African Mint. They are 1-oz gold coins intended to add to the South African gold market and allow private ownership of gold. Originally distributed for collectors, this gold bullion coin has become one of the most commonly traded in the gold coin market.
The face on the front of the coin features Paul Kruger. He served as president of the South African Republic between 1883 and 1900. The name “Krugerrand” combines the former president’s last name with the word “rand,” which is the name of the currency of South Africa.
The reverse side features the national animal of South Africa, the springbok antelope. Underneath the animal are the printed words “fine gold” in English and Afrikaans.
Krugerrands the market like any other currency on the market. Today, the South African Reserve Bank distributes them. However, these coins do not work like usual coins, such as pennies and nickels. Instead, they are treated similarly to gold. The value depends on the state of the gold market.
Are Krugerrands Produced Only by the South African Mint?
Krugerrands originate from the South African Mint. The production process of these coins began in 1967, intending to build up South Africa’s gold market.
South African Gold Krugerrands coin features 91.7 percent pure gold – the rest is copper. Moreover, the South African Mint produced them to be stronger and more resilient than standard 24-karat gold. Instead, a Krugerrand contains 22-karat gold.
What Is the History of Gold Krugerrand Coins?
The South African gold Krugerrand, upon first minted in the late ’60s, was very popular amongst traders. In the following decade, its popularity only grew.
At the time, the United States government did not allow ownership of gold bullion coins. However, it did allow the trade of foreign coins. As a result, the gold Krugerrand coin became popular in the U.S., as the currency had legal tender status.
In the 1980s, many countries began to ban the use of Krugerrands because of apartheid policies. The United States banned gold Krugerrand coin imports in 1985. During this time, other countries began minting gold coins.
After the end of the apartheid regime in 1994, many governments, including that of the United States, lifted their bans on importing South African gold Krugerrand. Still, the decline in value prevailed as many traders were unaware of the lifted restrictions.
The South African gold Krugerrand coin was one of the main sources of gold investment for traders all over the world in the 1970s.
During this time, the South African Republic was the world leader in gold production, accounting for more than 75 percent. This statistic reached 90 percent by 1980.
In the aftermath of the apartheid regime, South Africa and their gold production did not achieve the level of success formerly experienced in the 70s and 80s.
Though South Africa accounts only for six percent of the world’s gold, investing in a gold Krugerrand coin is still a great decision for investors, as the market treats the gold Krugerrand coin like any other precious metal.
What Is the Value of a Gold Krugerrand Coin?
The South African Mint first intended the gold Krugerrand coin to be distributed among investors and collectors alike. However, that is no longer the case.
Instead, gold Krugerrands do not have a fixed price, much like other precious metals. The coin values are based on the current value of gold as determined by the London Bullion Market Association. As such, these coins were designed to reflect the value of pure gold.
The South African Krugerrand can range in value–typically between $1200 and $2000. The price fluctuates depending on the gold market. The correct overall weight for a gold Krugerrand is 1 oz. It is a little denser than regular gold bullion coins for its gold content mixed with copper.
Despite South Africa’s decline in gold production over the last few decades, a Krugerrand coin retains its value because of its matter. South African Krugerrands are a great investment opportunity for private ownership of gold.
What Is the Krugerrand Value By Year?
The gold market determines the value of this bullion coin. As such, the value ranges from year to year. South Africa saw the greatest boom in their gold content in the 70s and 80s, resulting in a high bullion value for these coins.
Many factors influence gold price and, consequently, the South African Krugerrand gold coin. Many industries rely on gold, thereby determining its worth. Industries such as jewelry and electronics use gold for their products.
Just as entire industries affect how much gold costs, even private investors have their share of influence. Since gold is one of the most popular commodities, the frequency of trade and investment for the metal impacts the gold Krugerrand worth.
Is the South African Gold Krugerrand Coin Growing in Popularity?
The South African Mint continues to distribute this gold bullion. Buying Krugerrands continues to be a popular choice of investment as the coins retain the same value as gold and are easy to store. It is safe to say that the popularity of the coin has remained consistent.
Additionally, South Africa has produced silver Krugerrands in addition to gold. These contain a one-troy-ounce weight of silver and hold a value between $20 and $40.
Silver Kruggerands were first minted and distributed in 2017 in honor of the 50th anniversary of the gold Krugerrand coin. Like its predecessor, the silver coin contains the same national symbols of South Africa: Paul Kruger and the springbok antelope.
Should You Invest in Krugerrand Gold Coins?
Krugerrands are a safe investment because they typically stay level with bullion value. Investing in gold is always a great option, especially considering how valuable gold has stayed throughout human history.
At the start of your investment, you may experience a depreciation in the value of gold. However, like other precious metals that have been valued for millennia, gold almost always returns to its original value, if not more.
As a result, when contemplating an investment in Krugerrands, the main consideration is the current effects of the gold market.
What Are the Pros and Cons of Investing in Gold Krugerrand Coins?
As with any investment, Krugerrands are not full-proof coins guaranteed to turn a profit. That’s why it is critical to understand the advantages and disadvantages of putting your hard-earned money into a physical investment such as Krugerrands.
Krugerrand coins are great for new investors in addition to more experienced ones. The South African government intended for the Krugerrand to be treated as currency in its early days of production.
As a result, it is not too difficult to understand the coin’s role in the economy. Plus, it is simpler to purchase and easy to convert back into cash.
Another reason to put money into Krugerrands is that they are physical investments with the same standard weight across every coin. Each one weighs one troy ounce of gold. This makes it simpler to manage, as there is no risk of erasure.
Krugerrands possess mostly gold in their concentration, but they also contain a small portion of copper. This is so that the coin is more durable than standard gold.
An investment in Krugerrands means less maintenance and more peace of mind. Additionally, their size makes them easy to transport and store. Especially for beginner investors, this is a great perk.
Since Krugerrands are physical in nature, the biggest downside could be that this is not the proper investment for you. Caring for this bullion coin includes storage. Though they are easy to store, it may not be convenient if you want to possess more than one coin.
Additionally, storage in itself can be an investment if you want a secure storage place out of your hands. Plus, theft plays a role in how and where you store your gold bullion coin, and that may not be a price worth incurring.
You can rely on gold to hold its value. However, you cannot expect it to grow like other investments on the market. This coin’s disadvantage regarding its value is that it cannot appreciate.
Conclusion: Understanding the Worth of Gold Krugerrand Coins
Krugerrand gold coins are treated much like standard gold. They are a reliable investment for long-time investors, beginners, and everyone in between.
Starting as fodder for collectors and turning into its own currency, Krugerrands now serve as a considerable trade in the gold market.
The value of Krugerrands is based on the gold market. Currently, you can count on the price between $1200 and $2000. Since all the coins weigh equally with each other, you get a better understanding of your investment.
Though the South African gold market has declined in their production, you can still be sure that Krugerrands are a good or safe investment for their consistent makeup of gold and copper.
Overall, these popular bullion coins are a dependable place for your money. They are worth a consistent value and may even be worth adding to your portfolio.