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The South African Krugerrand gold coin is a 22 karat gold bullion coin made by the Rand refinery in South Africa. South Africa is a top ten gold producing country in the world with over 61 million ounces of Gold Krugerrands in circulation since the coin’s inception in 1967. In 1970, shortly after the Krugerrand was introduced, South Africa was the largest gold producer in the world and held more than 75% of the world’s gold reserves. In the 1970s and into the 1980s, Krugerrands were a leading choice of gold investors.
Interestingly, the Krugerrand coin does not bear a currency denomination, whereas many other nationally minted gold coins do.
With the Krugerrand being one of the most recognized gold coins in the world, it is a highly liquid investment. The Krugerrand is a South African gold coin, first minted in 1967 to help market South African gold and promote the holding of private wealth in gold.
The coin, produced by the South African Mint, proved popular and by 1980 the Krugerrand accounted for 90% of the gold coin market. On the obverse of the Krugerrand is former President Paul Kruger, from 1883 to 1900, with the name of the issuing country in Afrikaans and English in the legend, whilst the reverse depicts a springbok antelope with the mint date in the field. The name itself is a compound of Kruger (the man depicted on the obverse) and rand, the South African unit of currency.
During the 1970s and ’80s some countries forbade import of the Krugerrand because of the association with the apartheid government of South Africa, which has since been abolished. Ronald Reagan even banned the importation of Krugerrands back in the 1980s. The Krugerrand today is a popular coin among collectors.
The Krugerrand was minted with the intention that it would circulate as currency, and so therefore was minted with a more durable copper-gold alloy. In spite of the coin’s legal tender status, economic sanctions against South Africa for its policy of apartheid made the Krugerrand illegal in many Western countries during the 1970s and 1980s
These sanctions against the South African Gold Krugerrand were lifted in 1994 when apartheid was abandoned. By 1980, the Krugerrand comprised 90% of the global gold coin market, and that year South Africa issued three smaller coins in the form of a half ounce Krugerrand, quarter ounce Krugerrand and tenth ounce Krugerrand.
By the beginning of 2009, Krugerrand coins containing 46 million ounces of gold have been sold. In fact, the Gold Krugerrand has been the inspiration for many other gold-producing nations minting their own bullion coins, like the Canadian Gold Maple Leaf in 1979, the Australian Nugget in 1981 (which today is known as the Australian Kangaroo), and even the American Gold Eagle in 1986 and the British Britannia Coin.
The Krugerrand is 32.77 mm in diameter and 2.84 mm thick. The Krugerrand carries an actual weight of 1.0909 troy ounces or 33.93 grams because of its copper content. A gold alloy that is 91.67% (22 karats) also contains copper (also used in English gold sovereigns) to make it handle wear better. This copper gives the Krugerrand its orange appearances in contrast with other gold bullion coins.
The Johannesburg Stock Exchange (JSE) trades in Krugerrands through a secondary market in the same way as any listed equity market instrument, with quoted prices based on the weight of the coins.
When Krugerrands were first minted in 1967, the United States did not permit its citizens to own gold bullion, but it did permit ownership of foreign coins. Krugerrands, therefore, could be bought and sold in the U.S.
The Krugerrand’s image suffered as awareness about South Africa’s apartheid grew. Several Western countries banned the import of Krugerrands, as part of economic sanctions against South Africa due to apartheid. The US banned the import in 1985. When apartheid was ended in South Africa, economic sanctions were lifted.