WHAT IS Krugerrand Gold Coin
The Krugerrand gold coin is a gold coin minted by the Republic of South Africa. Krugerrand gold coins contain exactly one troy ounce of gold. This coin was first minted in 1967 in order to stimulate the market for South African gold. It is considered legal tender within the country.
BREAKING DOWN Krugerrand Gold Coin
The Krugerrand is one of the most frequently traded gold coins in the world market. The coins bear the image of Paul Kruger, who was president of the South African Republic from 1883 to 1900. Kruger held office when one of the world’s most profitable mines, Durban Deep, was founded in 1896. He was also president during the Witwatersrand Gold Rush, which led to the establishment of Johannesburg, one of South Africa’s largest cities.
South Africa minted the coins to help sell the country’s gold to private owners. The country was the largest gold producer in the world in 1970, holding more than 75 percent of the world’s gold reserves. Through the 1970s, Krugerrand gold coins quickly became the leading choice for gold investors. By 1980, the Krugerrand overwhelmingly dominated other gold investments, accounting for 90 percent of the world’s gold-coin market.
In 2016, the nation’s gold output had dropped by 85 percent since 1980, and South Africa produced just 6 percent of the world’s gold.
The Krugerrand was the first gold-bullion coin that was tenderable at the market value of its face gold content. Because it was not supposed to be a replacement for the currency, it is considered to be a medal coin by definition.
Investing in Krugerrand Gold Coins
Krugerrands remain a popular investment for gold investors in part because of their value and small size, which makes for easy storage. Many gold investors consider this precious metal a safe investment that will retain its value even in an economic collapse. Owning a tangible asset appeals to some investors, who put greater trust in physical coins or bars than a security that exists only on paper.
Investors continue to buy gold because of the proven longevity of its value. Some other popular gold bullion coins are the American Eagle, Canadian Maple Leaf and Chinese Gold Panda. In addition to the countries that produce these popular coins, Australia, Russia and Peru also rank among the top gold-mining countries in the world.
Investors interested in buying Krugerrand gold coins should have a secure place to store their investment. They should also be wary of scammers, seek a reputable gold dealer and brush up on their state’s tax laws, which could include a sales tax on gold.