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Introduction to Krugerrand Gold Bullion Coins
Gold
is the most iconic precious metal on Earth and has gained tremendous
attention from investors interested in making sound investments. Among
the traded forms of gold, the South African Krugerrand has attained a
status of globally accepted bullion. Krugerrand gold coins
can be used as a hedge against uncertain economic conditions and be
passed on to future generations of a business. The coin is highly sought
after even by small investors because of its reliability in trade. The
one troy ounce Krugerrand coin is 22 karats of fine gold. The coin has
91.67% gold and 8.33% copper to make an alloy which protects against
wear, prevents scratches and enhances the coin’s durability.
Uniqueness of the Krugerrand
The South African Krugerrand is the world’s first bullion gold coin
with over fifty-four million in circulation to date. The coin has a
32.6mm diameter and was first minted in 1967. The Krugerrand has an
embossed figure of President Paul Kruger on the face and a Springbok
antelope at the back. The Springbok antelope is considered a national
symbol of South Africa.
The appealing side from the investor’s point of view is that the Krugerrand coin carries international success in regard to its acceptability. Practically, all the banks worldwide purchase South African Krugerrand coins and they can be flexibly converted into cash as their universal value is directly linked to the gold index.
The success of the South African Krugerrand has led to many other countries to mint their own coins, the most popular of which are the Canadian Maple Leaf, the British Britannia Coin and the American Gold Eagle.
South Africa’s idea of minting coins instead of gold bars has let new investors pour in the trade. The Krugerrand essentially made owning gold simple. The Krugerrand coin can easily be bought and sold almost anywhere in the world. Apart from this, investing in Krugerrand gold coins gives investors the security and confidence of gaining greater returns.
The appealing side from the investor’s point of view is that the Krugerrand coin carries international success in regard to its acceptability. Practically, all the banks worldwide purchase South African Krugerrand coins and they can be flexibly converted into cash as their universal value is directly linked to the gold index.
The success of the South African Krugerrand has led to many other countries to mint their own coins, the most popular of which are the Canadian Maple Leaf, the British Britannia Coin and the American Gold Eagle.
South Africa’s idea of minting coins instead of gold bars has let new investors pour in the trade. The Krugerrand essentially made owning gold simple. The Krugerrand coin can easily be bought and sold almost anywhere in the world. Apart from this, investing in Krugerrand gold coins gives investors the security and confidence of gaining greater returns.
The South African Krugerrand
In 1967, the Krugerrand was conceptualized as the
legal tender bullion gold coin. The aim was to allow private ownership
of Krugerrand gold coins for the general public. South Africa, being the
largest producer of gold, was able to mine enormous quantities of gold
around the Johannesburg deep mines. By the early 1980s the coin had been
marketed so well that South Africa held around 89% of the market share
in the global bullion coin industry.
Krugerrand coins are considered to be the most liquid form of gold today. They can be easily purchased in any quantity at the gold spot price. Apart from 1oz. coin, there are also ½ oz., ¼oz. and 1/10oz. coins available for investors to purchase. The legal tender of Krugerrand coins has made it exempt from VAT, import taxes and other duties.
Krugerrand coins are considered to be the most liquid form of gold today. They can be easily purchased in any quantity at the gold spot price. Apart from 1oz. coin, there are also ½ oz., ¼oz. and 1/10oz. coins available for investors to purchase. The legal tender of Krugerrand coins has made it exempt from VAT, import taxes and other duties.
Comparison of Krugerrand to other bullion coins
South Africa pioneered in producing the first standardized gold coin.
The Krugerrand coin success has led many other countries over the years
to develop their own bullion coins. The most popular ones are the
Canadian Maple leaf in 1979 and the American Gold Eagle Coin which was
introduced in 1986. Unlike the Krugerrand, the Maple Leaf is 24 karat
gold coin without the inclusion of any alloy to protect against wear,
tear and scratches.
The American Gold Eagle coin on the other hand has the same karat value like Krugerrand of 22 carats. It includes 92% gold combined with 5% copper and 3% silver to make a durable alloy. As a result, the American Gold Eagle has a lighter color.
The American Gold Eagle coin on the other hand has the same karat value like Krugerrand of 22 carats. It includes 92% gold combined with 5% copper and 3% silver to make a durable alloy. As a result, the American Gold Eagle has a lighter color.
American Gold Eagle gold bullion coins are considered to be one of
the best-selling investments worldwide as millions have preferred them
for investment purposes. Although Krugerrand coins still remain
immensely popular in the investment market, they are not imported
directly in the US market. Despite this, trading in the Krugerrand
vastly continues in US investment market on regular routine through
legal alternative channels. Another important fact to note is that
Krugerrand coins are usually sold at a slightly lower premium over the
spot rate than American Gold Eagle coins which hinders investors from
investing in South African Krugerrand coins.
Canadian Maple Leaf rounds are also very popular like American Gold
Eagle coins but are preferred less because they can be easily damaged
because of their pure gold construction. Although less popular gold
coins like Mexican 50 Pesos and the Australian 100 Corona are also
available in the investment market, the major reason of investors not
purchasing them is the lower premium involved as compared to Krugerrand
coins.
Although the South African Krugerrand has set the foundation for the gold coin investment market but there are still other countries gold bullion coins that can dominate the bullion coin industry. However with respect to hedging against uncertainty, liquidity issue and acceptance as legal tender, many investors worldwide to buy Krugerrand coins over other gold bullion options. The Krugerrand as a result retains the largest market share in gold trading today.
Although the South African Krugerrand has set the foundation for the gold coin investment market but there are still other countries gold bullion coins that can dominate the bullion coin industry. However with respect to hedging against uncertainty, liquidity issue and acceptance as legal tender, many investors worldwide to buy Krugerrand coins over other gold bullion options. The Krugerrand as a result retains the largest market share in gold trading today.
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