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South African Gold Krugerrands

Thu, 03/23/2017 - 21:10

High abundance product and also one of the least expensive coins due to low minting cost from the South Africa government. A Krugerrand is a South African gold coin, first minted in 1967 in order to help market South African gold. The coins have legal tender status in South Africa but are not actually intended to be used as currency; thus it is regarded as a medal-coin.

History

The Krugerrand was the first bullion coin that could be used as legal tender at the market value of its face gold content. Earlier gold coins such as the gold sovereign had a tender value in currency engraved on their face which could differ significantly from their market value. The Krugerrand was the first gold coin to contain precisely one ounce of fine gold and was intended from the moment of creation to provide a vehicle for the private ownership of gold. By making the coin legal tender, Krugerrands could be owned by citizens of the United States, which at that time prohibited private ownership of bullion but allowed ownership of foreign coins. Despite this, the policy of apartheid in South Africa made the Krugerrand an illegal import in many Western countries during the 1970s and 1980s, until the South African political reforms of the early to mid-1990s.

Properties

Krugerrands: Their gold content is exactly one troy ounce.

Originally, it was sold at a significant premium of five percent over the base gold value, and only one size of coin was made, containing one troy ounce (31.1035 g) of gold. Today Krugerrands are produced in a variety of sizes, at premiums of no more than one percent above the market price of gold.

Since the Krugerrand is minted from gold alloy that is 91.67 percent pure (22 karats), the actual weight of a "one ounce" coin is 1.0909 troy ounces (33.93 g), to provide one troy ounce of pure gold. The remainder of the coin's mass is made up of copper (2.826 grams), giving the Krugerrand a more orange appearance than silver-alloyed gold coins. Alloys are used to make gold coins harder and more durable, so they can resist scratches and dents during handling. In 1980, three other sizes were introduced, offering a half, quarter, and tenth ounce weights. In total, 54.5 million coins have been sold.

The Krugerrand gets its name from the fact that the obverse features the face of Paul Kruger, a prominent Boer resistance leader against the British, and eventually the fifth and last president of the old South African Republic, holding that office for four terms. The reverse depicts a springbok antelope, one of the national symbols of South Africa that was designed by Coert Steynberg and used on the reverse of the earlier five shilling South African coinage for King George VI and Queen Elizabeth II. The name "South Africa" and the gold content are inscribed in both Afrikaans and English.

The word "Krugerrand" is a registered trade mark owned by Rand Refinery Limited, a South African corporation of Germiston, South Africa.

The success of the Krugerrand led to many other gold-producing nations minting their own bullion coins, including the Canadian Gold Maple Leaf in 1979, the Australian Nugget in 1981, the British Britannia coin in 1987 and the American Gold Eagle in 1986.