South African Krugerrand
Actual Gold Content: 1.0 troy ounce (31.103 grams)
Diameter: 34 mm
(also minted in 1/2, 1/4, 1/10 ounce sizes)
The history of South Africa is inextricably bound to gold. Since the time the metal was first discovered in the Transvaal by Alec "Wheelbarrow" Patterson in 1873, the international ebb and flow of gold's fortunes figured directly in the fortunes of South Africa itself. The two Boer Wars in the late 19th century, between Dutch (Afrikaners) and British settlers, were essentially territorial battles over the South African gold fields. Paul Kruger, whose portrait graces the obverse of the famed Krugerrand bullion gold coin, led the Afrikaners and in 1883 became the first president of the new South African Republic. At the end of the 19th century, the Second Boer War culminated in defeat of the Afrikaners resulting in British accession to sovereignty.
Shortly thereafter, the Union of South Africa became the largest gold producing country in the world -- a position it held for most of the 20th century with production at times accounting for as much as one-third the world's total output. Now, the South African mines, some of the deepest in the world, are in decline, and South Africa ranks as the world's second largest producer behind China.
The first Krugerrand was minted in 1967 as a gold bullion coin, the value of which was based upon the international spot price of the metal. The concept of a one ounce gold coin tied to spot gold's fluctuations quickly caught on. Nearly 50 million have been minted since 1967.
The Krugerrand is an alloyed coin at 22 karats, or .9167 purity. Denominated as one ounce of gold, it is struck with no face value indicated on the coin. Quite often contemporary investors purchasing Krugerrands are surprised to discover the coin they purchased bears a date other than the current year. This is testimony to the coin's duration as a market item and the strong secondary market it enjoys.
Featured on the coin's reverse is the springbok, a natural inhabitant of the dry savannahs able to run at speeds up to 80 km/hr and jump over 10 meters. The springbok is the icon of the national rugby team.
The Krugerrand was the first legal tender gold bullion coin to gain worldwide use in the modern era. To this day, many gold owners equate gold ownership with Krugerrand ownership. The Krugerrand as a bullion item received its first competition from the Canadian Maple Leaf, introduced in 1979. Eventually the Krugerrand was supplanted as the world's top seller -- in 1984 the U.S. Congress banned the import of the Krugerrand as part of the economic sanctions imposed on South Africa. The premium dropped to slightly-above the spot gold price and has only recently recovered in concert with the latest bull market rally in gold.