Happy birthday to the South African Krugerrand!
The first South African Krugerrands were struck on July 3, 1967, when the public was just beginning to gain interest in buying and holding gold coins for personal portfolios. Since then, Krugerrands have been struck every year with occasional small changes in diameter and thickness.
Follow along to celebrate the legacy of these gold bullion coins, learn more about their history and design, and about their place in today’s universe of precious metals.
Why Was the Krugerrand Minted?
The Krugerrand was initially minted to help promote South African gold; at the time, South Africa was a significant player in global gold production. The Kruggerand was South Africa’s first legal-tender gold coin tied to the spot price of gold, according to the South African Mint.
The Krugerrand was developed by the Chamber of Mines of South Africa, the South African Reserve Bank, and the South African Mint. It was intended to be an easy way to own a piece of South African gold. No one person can claim to be the creator of the Krugerrand, but John Edward Holloway—economic adviser to Union Corp., a member of South Africa’s Minerals Council—is credited with playing a pivotal role.
A portrait of Paul “Uncle Paul” Kruger, the first president of what is now South Africa, appears on the front of the coin; the portrait was designed by Otto Schultz, a die cutter at the Berlin Mint.
Originally designed and engraved by sculptor Coert Steynberg, the back of the Krugerrand features a springbok, an antelope that is the national animal of South Africa. The coin takes its name from “Kruger,” the president, and “rand,” South Africa’s unit of currency.
The coin has no face value. Instead, the price of gold on the open market dictates the value of the Krugerrand, according to CoinWeek.com.
The first Krugerrand consisted of 1 troy ounce of 22-karat gold. The other metal was copper, which bolstered the coin’s durability and generated the coin’s orange-gold sheen.
The Rise (and Fall) of the Krugerrand
In the first year of production, 40,000 Krugerrands were struck, in addition to 10,000 proofs; the original allotment was limited to one per resident of South Africa. Now, more than 61 million Krugerrands are in circulation, making it the world’s most popular coin in circulation.
Mass production of the 1-ounce gold Krugerrand started in 1970, according to CoinWeek.com. Half-ounce, quarter-ounce, and one-tenth-ounce versions debuted in 1980.
Through the 1970s, gold Krugerrand coins emerged as a top pick for people seeking to capitalize on gold as an asset, according to Investopedia. By 1980, the Krugerrand accounted for 90 percent of the world’s market for gold coins. Millions of Krugerrands flooded the U.S. market from the mid-1970s to the mid-1980s.
After the end of apartheid—South Africa’s system of racial segregation—in 1994, production of the Krugerrand plummeted. Production has since bounced back, but it hasn’t returned to its heyday levels of the 1970s and ’80s.
The Influence and Evolution of the Krugerrand
According to Numismatic News, the success—and eventual decline—of the Krugerrand prompted other national mints to try to exploit the gold bullion market. There was the Canadian Maple Leaf in 1979, the Australian Nugget in 1981, the Chinese Panda in 1982, the American Eagle in 1986, and Britain’s Britannia in 1987.
The Krugerrand also has spawned anniversary pieces and special strikings. For instance, to mark the coin’s 50th birthday in 2017, the South African Mint came out with Krugerrands in various sizes and types. This included the first Krugerrands struck in both platinum and silver, according to Numismatic News. In making these special coins, South African Mint engravers returned to the original 1967 wax molds and artwork.
Over the years, several slight alterations have been made to the Krugerrand’s design. For instance, the ground under the springbok has been tweaked several times, reports Numismatic News. Also, the animal’s body has changed. On the original coins, for example, the springbok’s legs were “quite slim and elegant, but they’ve since become “more robust,” writes Numismatic News.
Today’s Gold Krugerrand
Fifty-two years after the Krugerrand emerged as the world’s first gold bullion coin, it remains an important and coveted form of currency.
Three factors influence today’s price of Kruggerands:
- The price of gold
- The exchange rate between the U.S. dollar and the South African rand
- The market appeal of the coin
“Throughout history, gold has had universal appeal as a safe haven. Investors typically still view gold as a safe [harbor] for their wealth. Gold is a hedge against inflation, deflation, and geopolitical and macroeconomic risk,” South Africa’s Minerals Council says. “And the Krugerrand, in its range of weights, makes this investment in gold possible for many people. Furthermore, because of its content, a Krugerrand can be readily liquidated into currency in most countries.”
If you’re interested in finding out more about the famed and celebrated South African Gold Krugerrand Coin, contact us today. The Krugerrand’s 52nd birthday is a great time to buy gold!