Some Things to Know if You’re Wondering About Investing in Krugerrands

Humans have prized Gold for its beauty for millennia. It has since become a popular investment, and Krugerrands have opened the market to far more people. In addition to ancient civilizations using Gold as a currency, it was also widely seen as a symbol of wealth and power and priced well beyond the reach of the ordinary citizen.

One of the most significant developments for this Precious Metal occurred in 1871 with the introduction of the international Gold standard, which pegged the Dollar and most major currencies to the metal’s value. A century later, the measure was abandoned, leaving market forces to determine the value of Gold. Initially, most trading involved the transfer of one-kilogram Bullion bars between banks and other financial institutions, again precluding participation by ordinary citizens. In South Africa, the launch of a one-ounce Gold coin bearing the head of Paul Kruger represented an initiative by the government to boost domestic sales of the yellow metal in a more affordable form. These golden images of “Oom Paul” quickly gained popularity with investors worldwide, and there are at least five good reasons to join them.

  • Krugerrands Will Outperform a Bank Savings Account

Before you put your scratch card winnings in a savings account, consider the miserly interest rates and the associated bank charges. A 30-day notice account will pay best, but that’s no advantage when you need some cash in a hurry. By contrast, a Krugerrand is instantly negotiable, and because its value is tied to the Gold price, you can generally rely on a substantial profit. While the spot price may sometimes fall, the overall trend has always been upward. For example, if you bought a one-once coin for R25 in 1970, you could have sold it for approximately R21 000 in 1999.

  • The Gold Price is Less Subject to Market Forces than Most Other Investment Vehicles

Stocks and shares, futures and exchange-traded funds are adversely affected by numerous factors, such as the pandemic and the war in Ukraine, that have disrupted supply chains. However, those same factors will often tend to boost the price of Gold. The main drivers of Precious Metal prices are supply and demand, and although politics may sometimes have an influence, it makes sense to invest in a product rather than its producer. Mines can go broke, but Gold endures.

  • Krugerrands are an Affordable Option

While not everyone can afford a one-ounce coin, the price at the time of writing was just over R35K. However, introducing half-, quarter- and one-tenth-of-an-ounce coins and a one-ounce Silver version has opened the option to anyone with a little spare cash.

  • Gold Provides a Hedge in a Volatile Market

The tendency of Gold to react inversely to hostile market forces has prompted many investors to replace part of their portfolios with this Precious Metal as a hedge. When stocks are under pressure, interest in Gold increases and the resulting gains can help offset their losses.

  • Where to Buy Krugerrands

Mr K is an accredited Bullion dealer and one of the few permitted to purchase Gold directly from the Rand Refinery, thus ensuring an authentic, high-quality product. Clients may buy online or from one of the Gauteng and Western Cape outlets. If you are ready to invest in Gold or Silver, why not visit our online store?

DISCLAIMER: The information above was derived from reliable sources and deemed accurate at the time of writing. However, changes following publication may have affected its accuracy. Such changes may occur without notice, and Mr K cannot be held liable for inaccuracies in this article’s content or how a reader may choose to interpret it.