Krugerrand

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Krugerrand
South Africa
Value1 troy oz. fine gold
Mass33.93 g (1.09 troy oz)
Diameter32.77 mm (1.28 in)
Thickness2.84 mm (0.11 in)
CompositionGold (91.67% Au, 8.33% Cu)
Years of minting1967 – present
Obverse
1 oz Krugerrand 2017 Bildseite.png
Design1984 by Otto Schultz - Profile of Paul Kruger with "SUID-AFRIKA·SOUTH AFRICA" in the legend.
Reverse
1 oz Krugerrand 2017 Wertseite.png
Design1984 by Coert Steynberg - A springbok antelope with the mint date in the field. The legend is inscribed with "KRUGERRAND" and the gold weight.

The Krugerrand (/ˈkrɡərænd/;[1] Afrikaans: [ˈkrœjərˌrant]) is a South African coin, first minted on 3 July 1967 to help market South African gold and produced by Rand Refinery and the South African Mint.[2][3] The name is a compound of Paul Kruger, the former President of the South African Republic (depicted on the obverse), and rand, the South African unit of currency. On the reverse side of the Krugerrand is a springbok, South Africa's national animal.

By 1980 the Krugerrand accounted for more than 90% of the global gold coin market and was the number one choice for investors buying gold. However, during the 1980s and 1990s, Krugerrands fell out of favor as some western countries forbade import of the Krugerrand because of its association with the apartheid government of South Africa.[4][5]

Although gold Krugerrand coins have no face value, they are considered legal tender in South Africa by the South African Reserve Bank Act (SARBA) of 1989.[6]

In 2017, the Rand Refinery began minting silver versions, which have the same overall design as the gold coin.[7]

History[edit]

The Krugerrand was introduced in 1967 as a vehicle for private ownership of gold. It was minted in a copper-gold alloy more durable than pure gold. By 1980 the Krugerrand accounted for 90% of the global gold coin market.[8] That year, South Africa introduced three smaller coins with a half troy ounce, quarter ounce, and tenth ounce of gold.[9]

Economic sanctions against South Africa for its policy of apartheid made the Krugerrand an illegal import in many Western countries during the 1970s and 1980s. The United States which had historically been the largest market for the coin, banned imports in 1985; the previous year, over US$600 million of Krugerrands had been marketed in that country.[4] Most sanctions ended in 1991, after the South African government took steps toward ending its apartheid policy.[10][11][12][13]

Production levels of Krugerrands have significantly varied since its introduction. From 1967 to 1969, around 40,000 coins were minted each year. In 1970, the number rose to over 200,000 coins. More than one million coins were produced in 1974, and in 1978 a total of six million were produced. The production dropped to 23,277 coins in 1998 and then increased again, although not reaching previous levels.

Over 50 million ounces of gold Krugerrand coins have been sold since production started in 1967.[14]

Variations and imitations[edit]

During the bull market in gold of the 1970s, the gold Krugerrand quickly became the primary choice for gold investors worldwide.[15] Between 1974 and 1985, it is estimated that 22 million gold Krugerrand coins were imported into the United States alone. This huge success of the Krugerrand encouraged other gold-producing countries to mint and issue gold bullion coins of their own, including the Canadian Gold Maple Leaf in 1979,[16] the Australian Nugget in 1987,[16][17] the Chinese Gold Panda in 1982,[18][19] the American Gold Eagle in 1986,[16][18] and the British Britannia coin in 1987.[16]

Private mints have also attempted minting gold and silver bullion rounds (the term coin denotes legal currency) in the style of the Krugerrand. The rounds often depict Paul Kruger and a springbok antelope, some even blatantly copying the design of the Krugerrands themselves, though the inscriptions are altered. These bullion rounds are not offered by the South African Mint or the Government of South Africa, and are therefore not official, have no legal tender value, and cannot technically be considered coins.

Properties[edit]

The Krugerrand is 32.77 millimetres (1.290 in) in diameter and 2.84 millimetres (0.112 in) thick. The Krugerrand's actual weight is 1 111 troy ounces (34 g). It is minted from gold alloy that is 91.67% pure (22 karats), so the coin contains one troy ounce (31.1035 g) of gold. The remaining 8.33% of the coin's weight of 111 ozt (2.828 g) is copper (an alloy known historically as crown gold which has long been used for British gold sovereigns), which gives the Krugerrand a more orange appearance than silver-alloyed gold coins. Copper alloy coins are harder and more durable, so they can resist scratches and dents.

The coin is so named because the obverse, designed by Otto Schultz,[20] bears the face of Boer statesman Paul Kruger, four-term president of the old South African Republic. The reverse depicts a springbok, the national animal of South Africa. The image was designed by Coert Steynberg, and was previously used on the reverse of the earlier South African five shilling coin. The name "South Africa" and the gold content are inscribed in both Afrikaans and English (as can be seen on the pictures of the coin).

Since September 1980, Krugerrands have also become available in three additional sizes containing 12 ozt (15.55 g), 14 ozt (7.78 g) and 110 ozt (3.11 g) of gold.[citation needed] On the occasion of the 50th anniversary of the coin range, fractional sizes of 1/20 and 1/50 oz were also added.

The word "Krugerrand" is a registered trademark owned by Rand Refinery Limited, of Germiston.[citation needed][21]

Specifications
Denomination Diameter*
(mm)
Thickness*
(mm)
Weight
(g)
Fineness Gold content Edge
reeded
(g) (oz t)
1 oz 32.77 2.84 33.930 22 karat 91.67% 31.103 1.000 160**
1/2 oz 27.07 2.215 16.965 22 karat 91.67% 15.552 0.500 185
1/4 oz 22.06 1.888 8.482 22 karat 91.67% 7.776 0.250 150
1/10 oz 16.55 1.35 3.393 22 karat 91.67% 3.110 0.100 115
1/20 oz 12.00 1.697 22 karat 91.67% 1.555 0.050
1/50 oz 8.00 0.679 22 karat 91.67% 0.622 0.020
* Maximum dimensions

Proof Krugerrands[edit]

The South African Mint Company produces limited edition proof Krugerrands intended to be collectors' items rather than bullion investments. These coins are priced above bullion value, although non-proof Krugerrands also have a premium above gold bullion value. They can be distinguished from the bullion Krugerrands by the number of serrations on the edge of the coin. Proof coins have 220 edge serrations, while bullion coins have 160.[22][23]

50th Anniversary Krugerrands[edit]

2017 marked the 50th year of issuance (1967–2017) and to commemorate the anniversary, the South African Mint produced "Premium Uncirculated" versions in gold (.916 or 22 carat) and for the first time also in platinum (.999 fine) and silver (.999 fine). The issue limit for these commemorative platinum, gold and silver coins was 2,017 for platinum, 5,000 for gold and 1,000,000 for silver. The commemorative issues are distinguished by a '50' privy seal mark above the springbok design on the reverse for the platinum and silver issues and to the right of the springbok design on the gold issues. In addition to the "Premium Uncirculated" issue, 15,000 silver "Proof" krugerrands were also issued as well as "Proof" krugerrands in gold and platinum.[14]

Export Control[edit]

The South African Reserve Bank restricts the exportation of Krugerrands by a South African resident to a non-resident to a maximum of R30,000 (about US$2,100 or 1,870 Euro as of June 2018). Visitors to South Africa can export up to 15 coins by declaring the items to the South African Revenue Service.[24]

Charitable donations[edit]

In the 21st century, Krugerrands have received media attention in the United States after anonymous donors have left the valuable coin in the Salvation Army's annual "Christmas Kettle" donation jars in various cities around the country.[25][26][27][28]

References[edit]

  1. ^ "Krugerrand - definition". Dictionary.com, LLC. Retrieved 11 August 2012.
  2. ^ "Products". Rand Refinery. Retrieved 19 April 2019. produced by Rand Refinery and the SA Mint
  3. ^ "Bullion". The South African Mint Company. Retrieved 19 April 2019. The South African Mint Company manufactures Proof Krugerrands, and jointly manufactures the Bullion Krugerrand with Rand Refinery.
  4. ^ a b Bob Secter (02 Oct 1985) Reagan Bans Imports of S. Africa Krugerrand, The Los Angeles Times, accessed 28 June 2018
  5. ^ Staff, Robin Foster of The Sentinel. "KRUGERRAND LUSTER DIM FOR LOCAL COLLECTORS". OrlandoSentinel.com. Retrieved 1 May 2020.
  6. ^ 17 (2) (a) "[...] the value of each gold coin so tendered shall be equal to the net amount at which the bank is prepared to purchase that gold coin on the day of such tender thereof [...]" [1], South African Reserve Bank Act, 1989
  7. ^ "The Silver Krugerrand has arrived" (PDF). Alchemist Issue 90. London Bullion Market Association. Retrieved 24 August 2019.
  8. ^ Tom Bethell (4 February 1980). "Crazy as a Gold Bug". New York. 13 (5). New York Media. p. 34.
  9. ^ "2010 Krugerrand Series". www.samint.co.za. South Africa: The South African Mint Company. 2010. Retrieved 30 July 2011.
  10. ^ Yearbook of the United Nations (Volume 45 ed.). United Nations. 1991. p. 114. OCLC 1768016.
  11. ^ Yearbook of the United Nations, Volume 45, p. 114, at Google Books
  12. ^ "Most South African Sanctions Lifted: ML&B White Paper - Morgan Lewis" (PDF). www.morganlewis.com. Philadelphia, PA: Morgan, Lewis & Bockius LLP. 1991. p. Page 2. Archived from the original (PDF) on 29 September 2011. Retrieved 30 July 2011.
  13. ^ Friedman, Thomas L. (11 July 1991). "Bush Lifts a Ban on Economic Ties to South Africa". The New York Times. ISSN 0362-4331. Retrieved 1 May 2020.
  14. ^ a b "Global Interest In Silver Investment Expands As South Africa Adds New Silver Krugerrand". SilverSeek.com. Retrieved 12 November 2016.
  15. ^ "Gold Krugerrands: Buying gold coins - 17 August 2007". Bullion Vault. Retrieved 11 August 2012.
  16. ^ a b c d "Swiss Gold Bug Cleans Out S Africa Krugerrand Coin Maker: COMMODITIES". Evening Standard. 28 August 2008. p. 33 – via ProQuest.
  17. ^ Rochette, Ed (31 January 1988). "Australian Coins Offer `nuggets' to Gold Buyers: FIVE STAR SPORTS FINAL Edition]". Chicago Sun-Times. p. 34 – via ProQuest.
  18. ^ a b Leckey, Andrew (12 September 1986). "U.S. GOING GOLD WITH EAGLE COIN: [SPORTS FINAL, C EDITION]". Chicago Tribune. p. 1 – via ProQuest.
  19. ^ Boye, Roger (13 August 1989). "Dealer Asks for U.S. Ban on Panda Coins: [FINAL EDITION, C]". Chicago Tribune. p. 11 – via ProQuest.
  20. ^ American Numismatic Association (1997). The Numismatist. 110. American Numismatic Association. p. 765. Retrieved 30 November 2011.
  21. ^ Gleason, Stefan (16 April 2015). "Why the Krugerrand Is the King of Gold Bullion Coins". Money Metals. Retrieved 20 April 2018.
  22. ^ Gleason, Stefan. "Why the Krugerrand Is the King of Gold Bullion Coins". Money Metals Exchange. Retrieved 27 July 2015.
  23. ^ "2008 Krugerrand Series". South African Mint Company. Archived from the original on 10 March 2009. Retrieved 6 June 2009.
  24. ^ Financial surveillance and exchange controls FAQ
  25. ^ "Salvation Army of Tallahassee receives rare South African Krugerrand coin". WTXL. 26 December 2019. Retrieved 26 December 2019.
  26. ^ Glenn, Stacia (22 December 2011). "Krugerrand dropped into Salvation Army kettle". The Seattle Times. Archived from the original on 20 December 2014. Retrieved 8 August 2019.
  27. ^ "For fifth year in a row, mystery person drops a gold coin in Salvation Army kettle". AP. 13 December 2013. Retrieved 14 December 2013.
  28. ^ "Gold Krugerrand appears in a Salvation Army red kettle". WDAY. 20 December 2012. Retrieved 26 June 2013.

External links[edit]