Bank Your Assets In Krugerrand Gold Coins

Ownership of Krugerrand gold coins is the kind of solid investment that very wealthy people make as this top brand has been a good buy since its advent on the market. Made from gold mined in South Africa, this prestigious brand continues to hold firm.

Johannesburg is literally built over the gold reef that caused the gold rush in 1886. The gold discovered has formed the strongest economy in Africa and still determines many of Johannesburg's activities today. Krugerrands were introduced to encourage private buyers of gold and to open the market up to international buyers.

When first made by the South African government, the Krugerrands were intended to be used as currency although the alloy used was more durable than the norm for bullion coins. Although the gold's value was more than the coin's value as legal tender, this opened up a loophole allowing people in other countries to own a gold Krugerrand. In the US for example, possession of bullion coins was illegal but possession of foreign currency was not. Sanctions imposed on South Africa made the Krugerrand an illegal import until apartheid ended in 1994.

When gold was discovered, Paul Kruger was the President of the then Zuid Africa Republiek or Transvaal and was to remain so for four terms. His face is on the obverse side of the coin with the South African national animal, the springbok on the reverse.

The Krugerrand has an coppery glow to it due to the approximately 3 g of copper added to the 22 carat gold coin. The copper makes the coin less vulnerable to wear and tear.

The price of gold hit $800 per ounce due to the 1979 invasion of Afghanistan by the Russians, and this prompted the introduction of a full range of Krugerrand coins, namely a half ounce, quarter ounce and tenth of an ounce. The success of the Krugerrands encouraged Britain, the US, Australia and Canada to produce their own gold coins.

More than 55 million 1 ounce Krugerrands, manufactured by the South African Mint Company have been sold. The R/$ exchange rate has seen a high of R 10,500 per ounce for the Krugerrand, and it is an excellent currency hedge for South Africa.

The value of gold has increased and the Rand has depreciated against the Dollar, which means that both the Krugerrand and the metal it is made of have sky-rocketed in value over the years. Each one troy ounce coin is sold for a premium of up to 4% of the gold value, with smaller coins having higher premiums. In comparison the Canadian Gold Maple Leaf coin is not as tough being made from purer gold, and the American Eagle gold coin cost more per ounce.

Sparkling stones and shiny rocks have always fascinated the human race. Ultimately these objects retain their value due to the worldwide agreement that gold and diamonds are so important. When financial unstable global markets bring gloom and doom, maintaining an asset base in valuable metals and gems, has made the portable Krugerrand an even more popular investment.