The Turbulent History of South African Krugerrands
The Turbulent History of South African Krugerrands
South African Krugerrands possibly are the most desired and respected gold coins on Earth. Krugerrands consist of exactly 1 oz (33.93 g) of gold, and small bit of copper (2.826 g) to form a more durable alloy. Therefore the total weight of the coins is 1.0909 troy ounces (or 33.93 g). Some collectors and investors worry that Krugerrands contain less gold than pure bullion coins like the Canadian Maple Leaf because they contain copper, but the truth is that a 1 oz Krugerrand contains 1 full ounce of gold. The weight of the additional metals is not counted in the gold’s weight. South African Krugerands introduced one ounce gold coins to the world.Before the production of Krugerrands, most gold coins had contained uneven amounts of oure gold that corresponded with the coin’s face value, since the gold standard still applied.
The Krugerrand is named after Paul Kruger, the Boer resistance leader fifth president of the South African Republic. Kruger’s image is shown on one face of the Krugerrand, while a picture of a springbok antelope is on the other side.. Both are world-famous symbols of the Republic of South Africa. The famous Kruger National Park is also named after Paul Kruger.
Krugerands started to be produced in 1967 in order to sell South African gold outside of the Republic. The coin has legal tender status in South Africa, with it’s value corresponding to the current market values of 1 troy oz. of gold. There was a somewhat sneaky reason for making the coins legal tender, and it wasn’t because South Africa wanted gold coins to be in regular circulation. It was because legal tender coins can be considered collectibles in other countries.. During that time period, it was illegal for US citizens to have privately owned gold bullion, but they were allowed to own “collectible” foreign coins, with the catch being that they had to be legal tender. South Africa made use of the “collectibles” loophole by selling a lot of Krugerands to US buyers. The US government turned a blind eye, perhaps so that those “in the know” (most likely wealthy people) would have a chance to get around the rules, while leaving most citizens out of the gold market.But in later years, the USA and other countries banned the importing of South African gold coins to protest the Apartheid regime. It during the time of the Krugerand’s banning that other countries started to produce legal tender gold coins to fill the demand in the absence of the old supply of Krugerands.
Even though it is normally only a 1 ounce coin, in 1980 the Krugerand was minted in fractional denominations of 1/10 ounce, 1/4 ounce, 1/2 ounce, and 1 ounce. Also, in the early 80s, somebody minted a bunch of “Silver Krugerands”, but nobody knows who, since they were minted privately and illegally.. The coins show no reference to South Africa on either side, which is possibly in order to get around apartheid bannings (since these were not legal tender).South Africa’s mint, since permission was not obtained to use the name. There is no indication on the coins of who they were minted or issued by.
Despite the presence of Canadian Maple Leaf gold coins, Australian Kangaroo gold coins, and US American Eagle gold coins on the market, South African Krugerrands are still seen as “classic” gold bullion coins because they were the first legal tender 1 oz coins. It is also popular for it’s different appearance, having a slightly orange, penny-like copper tone that makes it stand out from other more lightly colored gold coins (either made with silver alloys, or of 100% pure gold).
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