The Krugerrand, the first bullion coin

Why it counts as the first bullion coin

Before 1967, owning gold mostly meant jewellery, bars, or older coins valued for their rarity. The Krugerrand, first struck on 3 July 1967, did something new. It was made to be bought and sold purely for the gold inside it. It carries no printed face value at all: its worth is one troy ounce of gold, no more and no less. That idea, a coin as a convenient unit of bullion for an ordinary buyer, is why it is widely regarded as the first modern bullion coin, and why the American Eagle, the Canadian Maple Leaf and the rest all followed the pattern it set.

Why a Krugerrand is 22 carat

Pure gold is soft. A 24 carat coin, handled and stacked, would nick and scratch. So the Krugerrand is 22 carat, 91.67% gold alloyed with 8.33% copper, the copper chosen because it hardens the coin and lends it a warm reddish tone. The clever part is that the alloy does not water down the gold. A one-ounce Krugerrand is minted to weigh 33.930 g gross, of which exactly 31.103 g, one full troy ounce, is fine gold. The balance, about 2.83 g, is the copper. You are not buying a fraction of an ounce dressed up as one. You are buying a full ounce, plus the copper that protects it.

Paul Kruger and the springbok

The obverse carries Paul Kruger, the last president of the old South African Republic, from an 1892 portrait by Otto Schultz. The reverse carries the springbok, the national animal, from a 1947 design by the sculptor Coert Steynberg. The name itself is the two halves of the story joined together: Kruger, the president, and rand, the currency.

1980: the smaller coins and a 90% market

For its first years the Krugerrand came in one size only, the one-ounce coin, from 1967 to 1979. In 1980 three smaller coins were added, the half, quarter and tenth ounce, so a buyer could hold gold in smaller amounts. Its reach by then was extraordinary: by 1980 the Krugerrand made up about 90% of the entire global gold-coin market. More than 60 million Krugerrands of all sizes have been struck since 1967.

The sanctions years, 1985 to 1991

The coin’s success made it a target. In 1985 the United States banned the import of the Krugerrand as an anti-apartheid sanction, and the ban held until it was lifted in 1991. For six years the world’s most-traded gold coin could not legally be brought into its largest market. Trade resumed in 1991, and the Krugerrand is sold worldwide again today.

Every Krugerrand begins as Rand Refinery gold. The Germiston refinery is the sole supplier of the gold in the bullion coin, and the South African Mint strikes it. None of that heritage changes the single fact a seller needs: a one-ounce Krugerrand is one ounce of fine gold, so what it is worth on any given day is simply that ounce at the current rand price. You can read that straight off the live Krugerrand price.

The Goldza desk

General information, not financial advice. Sources: Wikipedia (Krugerrand; Comprehensive Anti-Apartheid Act), CoinWeek, Chards, BullionStar and Stack’s Bowers; coin specifications and provenance per the South African Mint and Rand Refinery. Weights are the published 31.103 g fine and 33.930 g gross.