Fake Krugerrands or Just Low Gold Content?

We have discovered a major gold discrepancy in one of the worlds most recognised and trusted bullion coins - the South African 1oz Gold Krugerrand. We found the coin to contain nearly 2% less gold than it should have. 

Niton Test Results

We Niton tested a 2017 50th Anniversary 1oz Gold Krugerrand. The coin should contain one troy ounce (31.1035 grams) of gold, however we found it to contain 0.9816 ounces (30.5312 grams), almost 2% less gold content than it should have. Our original test is below. 

Metal Obverse Reverse
Gold 901 (+-3) 897 (+-3)
Copper 97 (+-1) 103 (+-1)
All shown as parts per thousand. The figures in brackets are tolerances.

To ensure the results were correct and there was not an issue with the Niton tester, we tested a series of coins from other world mints. These coins tested as expected. 

We checked the gross weight of the Krugerrand using our highly accurate diamond carat scale. The result was 169.816cts (33.96 grams) which fits the correct specification.

To put this into perspective, at the time of writing this article, the intrinsic value of a one ounce gold coin was £1008.20. The intrinsic value of the Krugerrand we tested was £989.65 - almost £20 less than it should be.

Further Investigation

After these findings we decided to test the coin further. If the metal for the blanks was alloyed or processed badly, it would be possible for a coin to give slightly different test results in different areas of the coins. We tested each side of the coin in 5 different places; the centre, 3, 6, 9 and 12 o'clock positions, and received similar results - none of which met the gold content that they should have. 

Reading Gold Maximum Gold Content Copper
Obverse Centre 902 (+-3) 905 98 (+-1)
Obverse 3 905 (+-3) 908 95 (+-1)
Obverse 6 902 (+-3) 905 98 (+-1)
Obverse 9 902 (+-3) 905 98 (+-1)
Obverse 12 904 (+-4) 908 96 (+-1)
Reverse Centre 903 (+-3) 906 97 (+-1)
Reverse 3 904 (+-4) 908 96 (+-1)
Reverse 6 899 (+-3) 902 99 (+-1)
Reverse 9 904 (+-4) 908 94 (+-1)
Reverse 12 902 (+-3) 905 94 (+-1)
Total 9027 9060  
Mean Average 902.7 906  
All shown as parts per thousand. The figures in brackets are tolerances.

It is highly probable that our mean gold reading of 902.7 ppt is very close to the actual gold content. It should be 916.6 ppt, so is deficient by just over 1.5%, a serious and significant negative discrepancy.

Tested by Sheffield Assay Office

We sent the coin to Sheffield Assay for further analysis. The 6 trials with XRF came out at 901-902 parts per thousand gold, confirming our suspicion. We are currently awaiting cupulation results for a full analysis. We have requested the assay office laser engrave the coin with the results. 

Not a One-Off Error

Coin blanks are not alloyed individually - they are made in batches. This means that the coin is extremely unlikely to be a single rogue error and there must be more coins that are below their specified gold content.

We believe this probably only affects the 2017 1oz Gold 50th Anniversary Krugerrands. If you have one we suggest you contact your supplier to ask if they can test it, or take it elsewhere to be tested. You need to specify that they do not acid test the coin as this will damage it. We'd be very interested to hear from you with the results! 

History of Inconsistencies

This is not the first time Krugerrands have been noted as having an insufficient gold content. In 2011, some proof Krugerrands were discovered to be underweight in their gold content. 

In 2010 the specifications of three of the four sizes of Krugerrands, as published on the website of Rand Refineries, the promoters of Krugers, were discovered to be incorrect. The same incorrect information appeared on hundreds of websites worldwide.

We were the first people to spot this; we contacted Rand Refineries with our research, and after initially referring us to their incorrect "specifications" page, eventually agreed with us and corrected their errors.

Are Krugerrands Trustworthy?

The Krugerrand was the original 1oz gold bullion coin, first minted in 1967. The coin still remains popular with investors due to its early uptake, worldwide promotion and recognition; although nowadays it has many competitors. To find such a large deficiency with its gold content is shocking, and is likely to cause a collapse in investor confidence in it.

As 22 carat gold, the coin should be 916.66 parts per thousand gold, so why is it showing as 901 parts per thousand?

Response from The South African Mint

We contacted the South African Mint on Wednesday 30th January to report our findings, but have so far heard nothing.  

At this years World Money Fair in Berlin we visited their stand to ask about the matter. We were told that the technical people were in a meeting until 3pm, but they had our stand number and would come visit us. Sadly, no one from the South African Mint visited us. We can't help but feel like we were being fobbed off, or perhaps nobody at the Mint is taking the matter, or our information, seriously.

You may be interested in reading more articles about Krugerrands.