Krugerrands were first minted and issued in 1967, and have been produced every year since. They have legal tender status in South Africa, which allowed them to be imported into many, but not all, countries without import taxes, duty or VAT.
If you’re planning to add gold to your portfolio and think coins are the way to go the Krugerrand has a lot going for it. It’s a thoroughly established brand with a reputation for quality, and demand is consistently high – you’ll have no trouble in selling off holdings. The Krugerrand is minted from an alloy of gold and copper – but the coin is sized so the actual gold content is exactly one ounce. That makes it easy to calculate their actual metal value.
Originally only one size was issued, which contained one full troy ounce (31.1035 grams) of fine gold. This was originally known as a Krugerrand, or Kruger, for short. From 1980, three other sizes were introduced, namely a half, quarter, and tenth ounce size. Because of these, the original Krugerrand is sometimes referred to as a "full" or "one ounce" Kruger or Krugerrand, although within the trade, the word Kruger or Krugerrand is understood to be the full sized original one ounce version.
According to the publicity at the time, the Kruger was to be made available to world bullion dealers at a 3% premium over the current gold fix, so that after distribution costs, the coins would be available to investors in quantity at about 4% to 5% over intrinsic gold values, and possibly 10% premium for single pieces. The premium on secondhand Krugerrands is lower than on new ones, although the difference isn’t as great as with some other coins, so this is a good way to maximize your gold holdings.
The fractional sizes were issued at higher premiums to bullion dealers of 5%, 7%, and 9% respectively. The fractional coins have never been as popular as the full one ounce coins, usually only being purchased as singles, so that in practice, it would usually cost 10% to 15% premium for the half and quarter ounce, and from 20% to 50% premium for the tenth ounce, most of which seem to have been used in jewellery.
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