The History of the Krugerrand
- One Ounce of Gold
- Back in 1967
- South African Mint and Rand Refinery
- Face Value of the Gold Krugerrand
- Introducing Fraction Krugerrands
- Low Premium Over Gold Content
- Higher Premium on Smaller Sizes
- Not a Pretty Sight
- VAT Introduced in 1973
- A Brief History
- Continuous Service from Chard
- Krugerrand Technical Specifications
- Krugerrand Serrations
- Silver Krugerrand
Everything you need to know about Krugerrands!
One Ounce of Gold
The South African Chamber of Mines had an inspired idea to help market South African gold. It was to issue a one ounce bullion coin, to be sold at a very low premium over the intrinsic gold value. They are still considered to be a good investment and continue to carry low premiums over gold. 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. You can see common misspellings of the Krugerrand here.
Back in 1967
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. You can see the mintage figures of Krugerrands here.
British Investors Missed Out
At the time of the Kruger's introduction, it was not legally possible for British residents to acquire bullion gold coins, so that the Krugerrand was almost unknown in Britain until 1971.
South African Mint and Rand Refinery
The South African Mint is legally responsible for manufacturing all legal tender coins in South Africa. The Rand Refinery is the only accredited LBMA refiner in Africa. The South African Mint and Rand refinery jointly produce the bullion Krugerrand; Rand Refinery supply the blanks for the coins and the South African Mint strike the coin. The newly struck Kruger then returns back to the Refinery for inspection, marketing and distribution.
The South African Mint however are solely responsible for the commemorative and proof versions of the Krugerrand.
The bullion Krugerrand, both silver and gold, are now produced underneath the company name "Prestige Bullion", which was formed in 2013 by Rand Refinery and South African Mint. Prestige Bullion is responsible for all South African bullion coins which have a local legal tender status.
Face Value of the Gold Krugerrand
The Krugerrand does not have a denomination on the coin, however, it does have legal tender status in South Africa. The face value of the Krugerrand is the value of the gold at the time it is traded. Therefore, 1oz gold Krugers have an ounce denomination, half ounce has a half ounce denomination and so on. The fact that it's face value is based on the lice proce of gold makes the Kruger a global currency.
Introducing Fraction Krugerrands
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.
Low Premium Over Gold Content
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.
Higher Premium on Smaller Sizes
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. Most bullion houses do not want the bother of handling small quantities of low value coins.
As an example of this, in the 1970's we, as a small provincial dealer, would frequently handle 500 Krugerrands in a single day, but a purchase of 100 tenth Krugerrands was a major event, yet it was only 1/50th the size of deal!
Not a Pretty Sight
Krugers were never intended to be an aesthetically pleasing coin, just a lump of gold with a known weight and value. They certainly cannot be called pretty.
Collectors seeking aesthetically attractive coins would be better looking at British gold sovereigns, or some of the newer bullion coins.
VAT Introduced in 1973
In Britain VAT was imposed on all coins, except antiques.
In January 1995, this was relaxed on almost all second-hand goods, including gold coins. This means that existing privately owned coins can be traded by dealers under a "special scheme" whereby the only VAT chargeable is on the dealer's margin, which is negligible. Because VAT was still payable on any "new" coins, it remained more difficult and expensive to buy and sell large quantities of bullion coins.
A Brief History
Continuous Service from Chard
Throughout the whole of this time, Chard have maintained a dealing service for both collectors and investors in bullion and numismatic coins. During the period from 1965 to 1971, we were one of only a small number of dealers who were granted a dealers licence. You can view why Krugers are a good buy here.
Krugerrand Technical Specifications
The following tables summarise the specifications of all the sizes.
|Size||Weight||Fineness||Gold Content||Gold Content|
For more information on technical specifications, please visit our Krugerrand technical specification blog.
For over 10 years we had an error on our pages regarding the number of serrations on the edge of the coin. We are happy to accept our mistake and have gone into detail on our Krugerrand Misinformation page.
In 2017, the South African mint issued a silver 1oz Krugerrand in a premium uncirculated (PU) condition. In 2018, under Prestige Bullion, a joint venture with the Rand Refinery, they produced the first silver 1oz bullion Krugerrand.
When this page was originally created, we could offer Krugerrands at 7% premium for singles, and 5% or £10 premium for quantity of ten or more, over the intrinsic bullion price.