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The gold Krugerrand is one of the earliest, if not the earliest type of modern bullion coin that gave rise to many other bullion coins of a vastly superior nature to it. Made in South Africa to this day, the Krugerrand was initially made as a medium by which South African gold could be capitalized on and sold to a larger market in 1967, and has proven to be popular to this day, albeit with a much smaller market than before. From the time of its inception, until the middle of the 1980s, the Krugerrand was the only reliably pure, standardized gold coin available in the market and accounted (in those days) for nearly 90% of the world’s total gold market, with hundreds, in not thousands of coins in the possession of independent investors, powerful conglomerates, and even governments for use as investment and hedge-material against economic pitfalls.
Being the earliest modern gold bullion made available for the general market prior to the introduction of other bullion coins such as the Canadian Gold Maple Leaf, the American Gold Buffalo, the Chinese Gold Panda, and many others, the Krugerrand can be considered the ancestor of all modern bullion coins. Its name is a compound of the cognomen ‘Kruger’, and the South African unit of currency – the rand. Named after the profile bust of Boer statesman and former four-term president of the now defunct South African Republic Paul Kruger, it shows the bearded statesman facing left, wearing a distinctly period outfit accompanied by the legend ‘SUID-AFRIKA * SOUTH AFRICA’ arching around the bust. The obverse design was made by numismatic designer Otto Schultz, and since the moment of its inception has been used as the sole face design of all issued Krugerrands. The reverse design was made by sculptor Coert Styenbern, and is shown depicting a springbok antelope – one of the national symbols of South Africa. It is accompanied by the legend ‘KRUGERRAND’ atop the profile of the antelope, with the date of mintage separated between the antelope’s body. Below it is a smaller legend indicating its weight and denomination (which had originally been only one ounce) accompanied by the phrases ‘FYNGOUD’ and ‘FINE GOLD’, the former being the Afrikaans word for the latter.
Despite being the earliest modern gold bullion, the Krugerrand was not made from pure 24-carat gold as are many of today’s bullion, but was made from an alloy of 91.67% gold ad 8.33% silver. Commonly known in the jewelry trade as ‘crown gold’ it was the choice alloy of the time for many ancient and early modern gold coins, as it gave the gold added durability which allowed it to last longer as a type of currency without wearing off to quickly. Despite the popularity of the Krugerrand, many nations once opted to boycott the import of the bullion in many Western countries due to the then current policy of apartheid in South Africa. Despite being recognized as legal tender and general currency in South Africa, the import of these sanctioned bullion coins was once illegal in many parts of the world, coaxing many countries to create their own versions of gold bullion to better cater to the growing market that was slowly coming to the forefront of the investment world during the late ‘70’s.
Owing to its (then) illegal nature prior to the abolishment of apartheid, many independent mints created their own version of the Krugerrand, even going so far as to blatantly imitate the designs of the Krugerrand itself and try to pass it off as authentic ones. These imitations, known as rounds (the term ‘coin’ is only applicable for something which possesses legal tender) are still available, albeit in ever-decreasing numbers, to this day. The South African government does not recognize the validity of these imitations and, in the Forgery and Counterfeiting Act of 1981, the Krugerrand and all its other denominations and fractional values became a protected coin.
Despite originally being available only in 1 oz denominations, other denominations have now been introduced, so that a ½ oz, ¼ oz, and a 1/10 oz gold Krugerrand are now available alongside the 1 oz coin. Aside from the standard issue bullion, the South African Mint also produces specially struck coins for collectors – known by everyone in the coin trade as ‘proofs’. These proofs cost more than the normal bullion coin and are more strikingly attractive than the normal bullions. Usually taking on a slightly reddish hue, compared to the yellow-orange of the bullion, these proofs are highly sought after by collectors and some investors. Unlike other coins which possess a mintmark to differentiate the proofs from the bullion, the Krugerrand has a more covert way of announcing its proof status, in that where normal bullion coins have 160 serrations on its edge, proof coins have 220.
Today, the Krugerrand is now generally considered to be a collectible coin more so than a bullion piece due to the rise of other gold coins of a finer and purer nature. In spite of this, some bullion investors still choose to buy a number of Krugerrands, if not for its historic appeal, then for its more affordable price.
Gold Krugerrand - References:
Content researched and created by Alexander Leonhart for coinandbullionpages.com © coinandbullionpages.com 2012
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