The popularity of the Krugerrand, or more specifically, the South African Krugerrand, has spread like a wildfire throughout the world since its introduction in 1967. It therefore doesn’t come as surprise that the Krugerrand, which is associated with gold from South Africa, counts among the Top 300 brands in the world today and that over 55 million have been sold up to date. This makes an investment in Krugerrands worth every penny, especially if one considers that Krugerrands have proven to be excellent storers of value, in many instances because of reputation alone.
Named after Paul Kruger…
Paul Kruger – President of the ZAR
The Krugerrand was named after Paul Kruger, courageous Boer resistance leader and the 5th President of the Zuid Afrikaansche Republiek (ZAR). It is therefore no wonder that the face of Paul Kruger or “Oom Paul” is imprinted on one side of each Krugerrand, and that the other side, has the Springbok imprinted.
Purity and weight…
The Krugerrand has a millesimal fineness rating of 0.9167 which means that it consists of 91.67% pure gold or is minted in 22 karat gold. Krugerrands are normally available in 1 t oz / ozt, ½ t oz / ozt, ¼ t oz / ozt and 1/10 t oz / ozt coins in terms of the weight of the gold content.
In addition to the above, the Krugerrand was the first coin to contain exactly 1 ounce of pure gold. A South African Krugerrand weights in total 1.0909 troy ounces (excluding the weight of other metals in the gold alloy). Please note that the extra weight won’t cost you extra or devaluate the coin.
Each Krugerrand is alloyed with more or less 2.8 grams of copper in order to increase its strenght and durability. Gold coins never consists 100% of pure gold. The reason for this is because gold alone is too soft to use in jewellery or to hold a form. It is therefore necessary to alloy gold with other metals such as copper, silver, nickel, zinc, et cetera to make it harder and more durable. This combination of gold with other metals is called “gold alloying” and the final compound is called “gold alloy” if it contains more than 50% gold.
One ounce of pure gold…
Krugerrands provide an excellent means of investing in gold, especially if one considers that each coin consists of exactly one ounce of pure gold (as mentioned above). This not only provides standarized measures of purity and weight, which make Krugerrands internationally acceptable, but it is also no secret that 1 ounce gold coins have proven to be the favourites of private investors around the globe.
Krugerrands provide the perfect Rand hedge given the fact that the price of Krugerrands are quoted in USD (United States Dollars).
An asset or investment provide a Rand hedge if it protects the value of one’s investment portfolio during times of exchange rate volatility. The Rand tend to depreciate or lose value against the major currencies over the long haul, which presents substantial risk to any investment portfolio which contains little or no Rand hedges.