An Introduction to Krugerrands

A copper and gold alloy, the 22K gold krugerrand coin is sought by numismatists and everyday people like you and me looking to buy gold. Discover the people behind the coin, and what makes its appearance unique in this short article.

South Africa need a way to monetize its vast resource- gold. The kruger, first struck in 1967, was the answer, exploiting a clever loophole by being marketed as legal tender. This allowed Americans to own krugerrands, but there were other complications, which we'll go into shortly. But first, a little about the pioneering kruger.

The krugerrand has become the default gold bullion coin for world investors. This was the first coin to be valued at the monetary value of gold. If you look a United States dime, unless it's a collector's item, it's worth ten cents. Krugerrands are traded differently based on the prevailing gold price A 22K kruger isn't stamped with a denomination in the traditional sense, but with the weight (1/4 oz, 1/10oz, 1/2 oz and 1 oz) of the gold it contains.

For most of the 20th century, US citizens could not own gold bullion legally, and thus would have been prohibited from buying Krugerrands. When the Republic of South Africa made them legal tender, this sidestepped the laws and allowed investors to buy them as "foreign coins." The practice of Apartheid was condemned by the west, and in the United States executive order stopped the purchase of krugerrand gold coins until the government ended the practice in the mid 1990s.

On the head of the krugerrand gold coin there is a picture of Paul Kruger, or Uncle Paul, the leader of the Boers and President of the Transvaal. A springbok antelope, a symbol of the Republic of South Africa, graces the tail.

Purchasing a krugerrand is not a difficult task, and not a bad idea in today's uncertain times. Twenty years ago gold was trading at around $600 a troy ounce. Today that figure is closer to $1000, which speaks to the strength and stability of gold. As the price of gold goes, so goes the price of a kruger. It's a good idea to watch the gold spot price, so you can spot opportunities to buy or times to sell.

Be wary of the silver "krugerrands" - they are not stamped out by the South African Mint- in fact no one knows where they came from. You can tell a silver krugerrand by the metal of course, the fact they don't have the country name on them, and they reference a different Kruger. They do, however, bear a springbok antelope. The government did not commission these coins and they are not authentic. Do not buy these coins. Sales of the krugerrands were dramatic, and other nations including Canada, the USA, and China have begun to sell their own gold bullion coins.