Jewellers' Network

Krugerrands are a gold mine of value


Fifty years since it was first introduced in 1967, Krugerrands has built an indisputable legacy as one of the leaders in the global gold bullion investment industry.

Since its launch, more than 53 million ounces of gold (over 60 million pieces) have been sold in the form of Krugerrands, more than its closest competitors, the Canadian Maple Leaf and the US Eagle.

The global appetite for gold has supported sales of 1.1 million ounces of gold bullion Krugerrands in 2016 worth US$1.3bn, making it the world’s best-selling new gold coin in that year. In 2016, the Krugerrand held a 26% market share of the global gold bullion coin market. 

According to Praveen Baijnath, CEO, Rand Refinery, the history of investing in modern gold bullion coins can be tied to the Krugerrand. The original intent behind the Krugerrand was to create a gold product that the “man on the street” anywhere in the world could legally own.”

The original purpose of the Krugerrand was to add value to South Africa’s gold production, which averaged 75% of the total global output between 1960s and early 1970s.

The first 22 carat gold Krugerrand was manufactured on 03 July 1967, making this year its 50th birthday.

An investment in the Krugerand is secure as its face value is denominated in ounces of pure gold while other gold bullion coins have a face value significantly below the value of gold. This means that the South African Reserve Bank (SARB) guarantees the purchase of any Krugerrand tendered for the ruling gold price on the day, whereas with other coins the issuing government only guarantees the face value.

“As a world class liquid asset, the bullion Krugerrand provides investors an opportunity to purchase physical gold which is recognised as a hedge against market uncertainty, as well as economic and political risk,” says Richard Collocott, Executive Head of Marketing, Rand Refinery.

“Infact because of its gold content, a Krugerrand can be readily liquidated into currency in most countries. A hedge against inflation, a gold bullion Krugerrand bought in 1967 for USD35 could return well over USD1200 today,” explains Collocott.