(Krugerrands
are commonly misspelled as Krugerands)
Today, the huge supply of Krugerrands on the
market makes it the least expensive choice in
tradable gold bullion. Although often discounted
on the resale side, Krugerrands are the choice
of many veteran gold buyers. "Why pay more?" they
would ask, "Gold is gold."
Gold bullion coins got their start in 1967
when South Africa introduced the Krugerrands.
South Africa is the largest producer of gold
in the world, and the Krugerrands helped the
country to market the vast stores of gold coming
out of the deep mines around Johannesburg.
The convenience of a legal tender gold bullion
coin, exactly one ounce of pure gold, guaranteed
by a government Mint for weight and purity, made
The Krugerrands the predominant way for individuals
to buy gold bullion in the 1970’s.
With the demise of gold as legal tender coins
in the first half of the 20th Century, the only
gold struck came to be special presentation pieces
and collectors issues, not the old fashion gold-for-money’s–sake
gold coins as had been produced for thousands
of years prior. Gold-for-gold’s-sake was
pretty much bullion bars, a form of gold whose
ownership was restricted in the United States
from 1933 to 1975. Gold coins came to mean coins
of numismatic or collectors value, coins which
traded for prices far in excess of their gold
value.
The South African Government changed that with
the introduction of the Krugerrands in 1967.
Here was a coin, with legal tender status,
purposefully made to trade just for its gold
value and the small cost of manufacture and distribution.
South Africa foresaw that gold ownership would
become increasingly popular among private individuals
as the U.S. dollar was no longer a fixed amount
of gold.
With the weakening of the dollar, the monetary
standard of the world was changing, and gold
would play a growing part in those changes.
The South African Krugerrands made gold ownership
simple by providing a one troy ounce unit of
gold that was easy to buy and sell all over the
world. Instead of odd-weight bars of gold, the
market for private gold owners now had the convenience
of mass-produced bullion coins.
Later, other countries followed suit and produced
their own bullion coins, but not before tens
of millions of ounces of gold Krugerrands were
sold all over the world.
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