Krugerrand coins offer straightforward prices, convenient sizes, value for money and in the current economical climate tend to be less risky than stocks and shares. More people trying to find a safe haven for their capital are buying South African 1oz Krugerrand coins as a gold investment vehicle. Finding the price of Krugerrand coins is made easy due it been the first gold bullion coin to be sold in ounces of gold as an alternative to been sold by it's face value. First introduced in 1967, over the years more than 50 million of them have been sold worldwide.
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Krugerrand coins were the first bullion coin designed for investors. Containing exactly one ounce of fine gold to make pricing them easy. Smaller compared to gold bars making them easier to store and handle. The Krugerrand is also a well recognized coin, making buying and selling them worldwide exceptionally easy. They provide a great vehicle for the private ownership of gold. Krugerrand coins have always been legal tender under South African legislation.
When attempting to find the value of Krugerrand coins you may ask why the price of Krugerrand coins is different from dealer to dealer when in essence they are selling the exact same coins.
To start with the spot price of gold is the value of gold per ounce at any set time. This is normally set via the current market and you can find the current spot price and gold charts on our spot price page. However not only is there a variation in price of gold bullion coins from one supplier to another the prices of the krugerrand coins continually appears to be higher than the gold spot price. Why is this?
For an example, lets say you're looking to buy a 1oz bullion coin. You first check the gold spot price and for arguments sake, lets say it's £1000 UK Sterling. Now let's say the best price you have found a one ounce Krugerrand for sale is £1100. What is even more confusing is you have found similar 1oz bullion coins like the Canadian Gold Maple Leaf or the American Gold Eagle selling for even higher prices. Since they all contain one troy ounce of pure gold, shouldn't they all be priced the same, what is causing the variations in the prices?
There are two main factors that add to the final selling cost of Krugerrand coins. First of all there is the production costs associated with manufacturing gold coins. Just like any other industry there will be a cost for turning the raw material, in this case gold, into the final desirable product, in this case gold bullion. This is commonly know as the coin premium and tends to vary among the various mints.
Additionally coin dealers will need to cover the cost of acquiring the coins and then selling them on. Dealers costs can vary considerably depending on the cost of shipping, storage and insuring the coins as well as other trading expenses and profit margins. When taking all these factories into consideration it is quite surprising that bullion coins still have such low premiums over spot prices.
Happily for us, the price difference between various dealers and the movement in spot makes for a buyers market. A shrewd investor can buy when the market price is low and sell again when prices increase, pocketing the difference after all the applicable costs. For the longer term investor shopping around to find the best prices and choosing when to buy and sell is all part of the enjoyment of owning physical gold.
Now issued in four different sizes, the 1oz or full Krugerrand as it is also known, the 1/2oz and 1/4oz, and the 1/10oz which is the smallest of the four coins. Minted as legal tender by the South African Mint, and because of this they carry all the benefits of investing in coins, unlike if you choice to invest in minted or cast gold bars which may need to be melted down.
The popularity of the South African Krugerrand prompted other countries to issue their own gold bullion. Some of the most popular ones include Great Britain's Britannia Sovereigns in 1987, the Isle of Man's Angel, the Australian Nugget in 1981, Canada's Maple Leaf in 1979, China's Panda and the American Eagle in 1986. Silver, and platinum are also available in the form of bullion coins, However, one ounce gold bullion coins are by far the most popular for both small investors and high net worth individuals who like the divisibility afforded by them.
The copper alloy put into the coins makes the Krugerrand rather distinctive. A great many other bullion coins are created with a copper and silver combination, providing them with a shinier appearance. The Krugerrand, on the other hand, features a deeper tone along with an almost reddish colour. In fact, many people believe that they appear similar to a penny, however this particular coin is undoubtedly made from gold. Because of this copper alloy blend, it's probably the most distinctive looks among all of the bullion coins.