The South African Krugerrand has a special place in the gold market. It was the first gold coin to be promoted for private investment as well as the first to be struck in precise 1 ounce increments of gold. As a result by the 1970s the Krugerrand was responsible for over 70% of Western gold output, and played an important role in the desire to own gold.

Origins of the Krugerrand

The Krugerrand was developed by a consortium of institutions including the South African Mint, Chamber of Mines South Africa and the South African Reserve Bank.  It differs from other gold coins in that it does not display a face value, either on the obverse or reverse sides.

This was done intentionally, to demonstrate that the coin’s value is directly associated with the value of the gold which is contained within it. While previous gold coins had been struck primarily for the rich and well heeled, the Krugerrand was designed for the working man who wanted to preserve his hard earned savings.

To understand the origins of the Krugerrand, it is first important to understand the time period in which it was introduced. The 1960s were a time of great political upheaval and uncertainty. The Cold War was at its zenith, various nations throughout Africa were gaining independence, and the conflict in Vietnam was in full swing.

At this time the U.S. dollar was the world’s reserve currency and was backed by gold, but Richard Nixon would end this after becoming president. These developments made other nations wary and South Africa made the decision to strike its own gold coin that could be adopted locally and internationally. This coin was the Krugerrand.

Krugerrand Facts

The very first Krugerrand was struck in 1967, and since that time, over fifty million variations have been minted. By the 1980s South Africa begin introducing fractional Krugerrand in sizes of ½ to 1/10 oz, to make them even more accessible and affordable. At the time the coin was capable of being converted into any currency, which made it quite innovative. As a consequence, the Krugerrand is considered the first bullion coin to be adopted worldwide.

The standard purity for the Krugerrand is 0.9167. To date, the Rand Refinery is the only institution that is allowed to manufacture and distribute gold blanks which can be used for Krugerrands. It is the biggest refining and smelting complex worldwide. The Krugerrand was designed specifically to be traded as gold bullion and is the perfect coin for private ownership and investment. Some of the benefits which you’ll gain by owning it include a low premium when compared to gold’s spot price and its high liquidity. Due to the fact that the Krugerrand is recognized worldwide, it can be traded for virtually any currency, anywhere, anytime. It has reeded edges, a diameter of 32.8 mm and most versions come in 22 karat gold. This is a coin that every diehard and serious enthusiast should have in their collection.