Krugerrand

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The face of Paul Kruger, shown on the obverse side of the coin.

A Krugerrand is a South African gold coin, first minted in 1967 in order to help market South African gold. The coins have legal tender status in South Africa but are not actually intended to be used as currency.

The Krugerrand was the first bullion coin to be tenderable at the market value of its face gold content; by contrast, earlier gold coins such as the gold sovereign had a tender value in currency engraved on their face, which could be completely divorced from their market value. The Krugerrand was the first gold coin to contain precisely one ounce of fine gold, and was intended from the moment of creation to provide a vehicle for the private ownership of gold. By bestowing legal tender status upon the coin, Krugerrands could be owned by citizens of the United States, which at that time prohibited private ownership of bullion but allowed ownership of foreign coins. However, due to the policy of apartheid in South Africa, the Krugerrand was declared illegal to import in many Western countries during the 1970s and 1980s until such system was lifted between 1990 and 1994.

Originally, it was sold at an exorbitant premium of five percent over the base gold value, and only one size of coin was made, containing one troy ounce (31.1035 g) of gold. Today, Krugerrands are offered in a variety of sizes and command attractive premiums of one percent (or less) above and below the market price of gold.

Since the Krugerrand is minted from gold alloy being 91.67 percent pure (22 karats), the actual weight of a "one ounce" coin is 1.0909 ounces (33.93 g). The remainder of the coin's mass is made up of copper (2.826 grams), giving the Krugerrand a more orange appearance than silver-alloyed gold coins. Alloys are used to make gold coins harder and more durable, so they can resist scratches and dents during handling. In 1980, three other sizes were introduced, offering a half, quarter, and tenth ounce weights. In total, 54.5 million coins have been sold.

Krugerrands: Their gold content is exactly one troy ounce.

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The Krugerrand gets its name from the fact that the obverse shows the face of Paul Kruger, president of the old South African Republic. The reverse depicts a springbok antelope, one of the national symbols of South Africa. The name "South Africa" and the gold content are printed in both Afrikaans and English.

The success of the Krugerrand led to many other gold-producing nations minting their own bullion coins, including the Canadian Gold Maple Leaf in 1979, the Australian Nugget in 1981, and the American Gold Eagle in 1986.