The Krugerrand

[Roy]

Confused.com

It seems that everything I thought I knew about the ubiquitous Krug was wrong?

Well, according to the Apmex 'Learning Centre'.

https://learn.apmex.com/learning-guide/are-krugerrands-illegal/

[LawrenceChard]

29 minutes ago, Roy said:

Confused.com

It seems that everything I thought I knew about the ubiquitous Krug was wrong?

Well, according to the Apmex 'Learning Centre'.

https://learn.apmex.com/learning-guide/are-krugerrands-illegal/

Good spotting!

It is probably worth showing their entire post here, before I comment:

Why Were Krugerrands Illegal?

Published on December 15, 2022

by APMEX

Krugerrands are bullion coins that were first minted in 1967 by the South African Mint and the Rand Refinery. The coins are made from gold and have a face value of one South African rand. They have been popular with collectors and investors worldwide since their release. Although importing Krugerrands was illegal for a brief time in the United States, there is still some confusion on the legality of the bullion coin today.  

The Controversy Over Krugerrands

The South African Government introduced the Krugerrand in 1967. Gold demand stayed high for the following ten years. At the market’s peak in 1979-1980, the Krugerrand was one of the bestselling Gold coins globally. 

As more people worldwide became aware of South Africa’s Apartheid policies, the Krugerrand gold coin lost popularity, especially as other competing gold coins were introduced to the market. In 1985, the United States Raegan administration called for the ban of importing Krugerrands in protest of apartheid. This American ban had a significant impact on South Africa’s economy. Premiums on Krugerrands fell below those of other competing bullion coins.  

Many investors misunderstood this ban and thought Krugerrands were illegal to own in the U.S. when the ban was on importing more Krugerrands rather than owning them. The ban was lifted in 1991 when the South African government took serious steps to end apartheid. Ever since then, Krugerrands have been legal to import, and they have always been legal to own. 

The ban on Krugerrands had a dramatic impact on the global bullion market. The 1985 ban on importing Krugerrands directly led to the creation of the American Gold Eagle. The US Mint stepped in to fill the void left by the Reagan administration’s ban and modeled the iconic coin after the Krugerrand. Vintage gold coins produced in America before this were made of 90% gold and 10% copper. And most modern bullion coins are .999 fine gold, also known as 24k.

The Krugerrand is 22k gold. This is a mixture of 91.67% gold, 3% silver with the remainder comprised of copper. The US Mint followed the roadmap laid out by the Krugerrand, and the Gold Eagle remains 22k today. Not only did the US Mint copy the composition, but they also mimicked the dimensions by offering four sizes that were identical to the Krugerrand. The Gold Eagle replaced the Krugerrand as the gold bullion coin of choice during the import ban and it has remained so even after the ban was lifted.    

Krugerrands Today

Today, Krugerrands are still considered one of the most popular gold coins in the world. They are legal to buy and sell and for countries to import and have been since 1991. These coins remain a smart and secure investment if you are interested in investing in gold.  

----

It is a typically US-centric post, as though the USA was the only country in the world, or the only one which matters.

In addition, there are a number of error or curiosities:

First, their page URL includes "are-krugerrands-illegal", but the title says "Why Were Krugerrands Illegal?" Later the article concludes "and they have always been legal to own".

I wonder who was this "Raegan administration"?

Some time ago, I Niton XRF tested a 1967 Krugerrand, and I need to find the results, however I doubt that there was 3% silver in these early coins. There certainly was a silver content, but I suspect it was lower. I also feel sure there was nothing in their original specifications which dictated the percentage of silver content.

The article omits the fact that more recent dates of Krugerrand are purely gold:copper alloys, with zero silver content:

https://www.chards.co.uk/blog/krugerrand-gold-content/507

Another point "And most modern bullion coins are .999 fine gold, also known as 24k." I would certainly disagree with that. Many modern gold are .9999 gold, with some even being .99999 fine. Only a few were ever .999 fine gold. As to these being know as 24k, although sadly this is true, they should strictly speaking not be known as 24k (or 24ct). Three-nines .999 gold is .999x24 = 23.976ct, which is not 24k! While I can understand amateurs being sloppy with their facts, I don't think it is great for professionals to do the same. Having said that, I am aware that our own website does sometimes refer to .9999 gold as 24ct, although on at least one of our factual information pages, we do present the facts accurately:

https://www.chards.co.uk/blog/0.999-gold/419

I have previously Niton XRF tested modern American one ounce gold eagles, but again, I would need to refer to my notes about them. The do contain some silver, but I don't know from memory what percentage.

I half expected the Apmex article to wrongly state the number of edge serrations, but they did not mention them. 

Some years ago, I was introduced to a couple of Apmex. This was probably in Berlin or Frankfurt, and I was happy to hear a great compliment from them, that whenever they wanted to know anything about gold coins, they referred to our (old) TaxFreeGold website!

😎

[Darr3nG]

I learned everything I know about Krugs from Lethal Weapon 2

[Roy]

1 hour ago, LawrenceChard said:

Some years ago, I was introduced to a couple of Apmex. This was probably in Berlin or Frankfurt, and I was happy to hear a great compliment from them, that whenever they wanted to know anything about gold coins, they referred to our (old) TaxFreeGold website!

They should've carried on with that tradition!

Apmex said:

The coins are made from gold and have a face value of one South African rand.

 

Whereas, Chards correctly note:

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.

The fact that its face value is based on the live price of gold makes the Kruger a global currency. 

UK 1, USA 0

😊

[Roy]

1 hour ago, LawrenceChard said:

The article omits the fact that more recent dates of Krugerrand are purely gold:copper alloys, with zero silver content:

Or as @Solachesis quipped:

'it's only natural for the brain not to locate the turd coloured springbok when thinking of gold.'

😂

[Tn21]

It's a shame that the krug does not get the love or respect it deserves from this forum. 

Spot + a few %,

if that when selling.

1oz Krug is a beauty of a coin with the added weight being 22 carrot it is fantastic in hand. 

 

[Roy]

23 minutes ago, Tn21 said:

It's a shame that the krug does not get the love or respect it deserves from this forum. 

That's what I like about the Krugerrand, it doesn't ask for love or respect. Chuck it in a drawer, tube 'em up.

You never feel remorse when you sell it, it did its job.

Sometimes it's hard to part with Sovs.

[Tn21]

Yh fair point Roy, it does seem to feel like a robust coin that can handle what ever life throws at it. 

 

[LawrenceChard]

1 hour ago, Tn21 said:

It's a shame that the krug does not get the love or respect it deserves from this forum. 

Spot + a few %,

if that when selling.

1oz Krug is a beauty of a coin with the added weight being 22 carrot it is fantastic in hand. 

I fully appreciate Krug https://www.krug.com/, and multiple Krugs are surely better than single Krugs, however we digress.

Although I would be pushed to call Krugerrands beautiful, they are a nice enough coin, and I hope I give them the love and respect they deserve.

As the world's first modern gold bullion coin, there will always be a place for them.

Of course, there are many who prefer the beautiful golden yellow colour of pure gold, rather than 22 carat, so when the Royal Canadian Mint introduced their gold maple leaves in 1979, it is understandable that they were preferred in some countries. 

In the UK, the fact that sterling is CGT exempt tips the balance slightly in favour of investing in UK coins.

Choice is generally good. We almost have too much of it!

😎

[dicker]

Krugs are “not to my taste”.

Perhaps I am sexist, but I prefer female monarchs, rather than beardie* Paul Kruger!

 

* No offence meant to any beard wearing TSF members!

[LawrenceChard]

28 minutes ago, dicker said:

Krugs are “not to my taste”.

Perhaps I am sexist, but I prefer female monarchs, rather than beardie* Paul Kruger!

 

* No offence meant to any beard wearing TSF members!

I don't think it is sexist to prefer female monarchs, or females in general for that matter.

I might have a shave in the morning!

😎

[bluemoon]

My first coin was a Krug, at first I was underwhelmed with the colour of it but I do like the cheap robustness of it. If CGT wasn't an issue I'd def have more of them.

[Anteater]

3 hours ago, Darr3nG said:

I learned everything I know about Krugs from Lethal Weapon 2

Me too. I have a couple and I kinda want to sell them and replace with more 2021+ Brits (it's nice to see them all looking the same, and with the gold content stated, security features, etc). But I do like the fact that the Krugs make me feel just a little like an international crime-boss.

[Britannia47]

Likewise, started with a few Krugerrands, kept one and swapped the others for other 1oz gold. The S.A.M. Was the only mint to show on the certificate exactly what the alloy consisted of - in this case 8.33% copper. It’s a pity the RM doesn’t declare its alloy, but it doesn’t take a genius to tell its ‘Red’ gold! for the Sovereign!

Anyway, here’s a copy of the C of A of the 1997 proof set and some additional info to illustrate this…..

 

[Britannia47]

Also in the early days a Krugerrand could be bought over the counter at your local bank, I believe, before the rise of the big-time bullion dealers!  This is an original container from Barclays Bank….

 

[Paul616]

I do prefer the glint of “pure” gold. CGT could be an issue with Kruger although I hope to just pass the majority of my coins on to my kids. Everyone needs a Krug in their stack though!

[Jake0111]

A krug thats ring mounted (probably worst condition coin i own) is the only peice of bullion i own that i wont sell. I would definitely buy another. 

[modofantasma]

11 hours ago, Britannia47 said:

Also in the early days a Krugerrand could be bought over the counter at your local bank, I believe, before the rise of the big-time bullion dealers!  This is an original container from Barclays Bank….

 

 

[modofantasma]

Love the Krugs. Not sure why I've no particular ties to SA or Springboks or bearded males for that matter 

 

[CANV]

My first one ouncers where brits.  I bought a krug just as it seemed great value at spot off the silver forum.   I love em.  Got a few more. 
mind you I love the early 22 carat Brit more.  That’s a coin 

[CollectForFun]

21 hours ago, Britannia47 said:

...

The S.A.M. Was the only mint to show on the certificate exactly what the alloy consisted of - in this case 8.33% copper. It’s a pity the RM doesn’t declare its alloy, but it doesn’t take a genius to tell its ‘Red’ gold! for the Sovereign!

...

Isn't the colour of the krugerrands still more yellow than the colour of modern sovereigns?

[Britannia47]

2 hours ago, CollectForFun said:

Isn't the colour of the krugerrands still more yellow than the colour of modern sovereigns?

Not really, but there may have been variations in the alloy content in the past. Don’t be fooled by @modofantasmas photo version - far too much yellow!🌝

Here’s a colour comparison photo of Kruger, a 2012 Sovereign and a 2017  1/4 QB, so judge for yourself.