The South African Krugerrand gold coins were first produced on July 3rd 1967 by The South African Mint. They were designed for the purpose of investment rather than a monetary instrument therefore there is no face value shown on the coin. The 1 oz gold bullion Krugerrand coin was the first gold bullion coin to be minted for the sole purpose of investment and the Krugerrand value is determined by the daily spot price of gold plus a small premium.
The Krugerrand gold coins soon became internationally recognized as an excellent way to invest in gold bullion and is now the most actively traded gold bullion coin in the world. Many other countries including the United States were inspired to start minting their own gold bullion coins like the American Buffalo gold bullion coins, Canadian Maple Leaf and the Austrian Philharmonic bullion coins. Around 50 million gold Krugerrands coins have been sold since 1967 which is more than the rest of all the world’s gold bullion coins combined.
Large numbers of gold Krugerrands were minted during the 1970s and first half of the 80s because of the huge demand from international investors wanting to buy the bullion coin to hedge against inflation. In 1973 as a result of the “Nixon shock”, President Gerald Ford made it legal once again for US citizens to own gold ending the prohibition which had been in force since 1933.
United States citizens then began to import the Krugerrand in great quantity for personal investment purposes. It is estimated that 22 million gold bullion Krugerrand coins were imported during the next 10 years. However, the US Government passed a law in 1985 prohibiting any importation of goods from South Africa because of their apartheid ruling government.
22 million Gold Krugerrands already in the US were still very actively traded after that time but no further imports were able to take place until 1994 when Congress finally lifted the ban on South African trade after they abandoned apartheid rule and the Krugerrand once again became the world leader in gold bullion coin sales.
South Africa has some of the deepest gold mines in the world and has been the largest producer for the last 100 years extracting up to 35% of the total world production of gold. Only recently have they been demoted to second place by China who now rank number one as the world’s largest producer.
The Design Of The Krugerrand. The obverse of the Kruger was designed by Otto Schultz in 1967. The countries name is written in English and Afrikaans, “South Africa” and “Suid-Afrika”. The profile is of Stephanus Johannes Paulus Kruger (10 October 1825 – 14 July 1904) better known as Paul Kruger. The name of the coin is made up of Kruger’s name and the name of the South African currency, the Rand.
Paul Kruger, the 5th President of the South African Republic was the face of the resistance against the British during the Second Boer War (1899 to 1902). The Boer wars were between the British Empire and the Dutch settlers over which white nation would have control over the Witwatersrand Gold Mines. The result was the Union of South Africa, a dominion of the British Empire in 1910.
The reverse was designed by Coert Steynberg and shows a Springbok Antelope which is the national symbol of South Africa. Also the words “Krugerrand” above, the purity and weight of the coin below, “Fyngoud 1oz Fine Gold”, along with the date of production. There is no face value inscribed on the coin as it is produced for investment purposes and the value is closely related to the spot price of gold.
The South African Krugerrand comprises of 91.67% pure gold and 8.33% of copper resulting in 22 karat gold to create better durability. The coin is heavier than 1 oz, it has a total gross weight of 1.0909 troy ounces so that the actual content of pure gold is 31.1035 grams, 1 troy ounce. This exact same formulation was copied in the US to make the American Eagle gold bullion coins and has been used for many years in England to produce the British Gold Sovereigns.
South African Krugerrand Bullion Coins have always stayed ahead of the spot gold price and the Krugerrand value has made it a very popular choice for investors around the world. The Krugerrand can also be included in an Individual Retirement Account Gold IRA.