Guide For When Buying Krugerrands

A Useful Guide for South Africans when Buying Krugerrands

Like most countries, South Africa has experienced an economic setback in the wake of the pandemic. The combination of supply disruptions and a weak Rand has seen the price of imported goods rise rapidly, forcing many to consider ways to secure whatever funds they still have at their disposal. Gold has always been one of the most reliable investment options, but buying Bullion bars is beyond most people’s reach. Jewellery items are typically subject to a 300% markup or more. On the other hand, Krugerrands offer a means to purchase smaller, more affordable quantities of fine Gold. Furthermore, their sale is exempt from VAT and should attract only a small premium. However, if you are unfamiliar with this market, you might find the following tips helpful.

Proof or Bullion?

This iconic Gold coin is available in two forms. Proof coins have a mirror-like frosted finish and have 220 sharp-edged serrations. By contrast, Bullion coins have a scratch-resistant matte finish and only 160 rounded edge serrations. However, the differences are not all about appearance. While Bullion Krugerrands are an investment vehicle, the proof coins are essentially collector’s items. They are of equal value in terms of their Gold content. However, collectors assign sale prices based on rarity and condition. In contrast, the prevailing Gold price is set internationally and determines the intrinsic value of Bullion coins.

A Choice to Suit Your Pocket

Since the release of the original one-ounce Bullion coin in 1967, the Rand Refinery has extended the range to include three fractional denominations. Investors with a limited budget or who may merely wish to “test the water” can now purchase smaller Krugerrands containing one-half, one-quarter or one-tenth of an ounce of fine Gold. Although generally less well-known, a version of the coin consisting of one ounce of Fine Silver offers the most affordable entrée for an understandably cautious first-time investor in Precious Metals.

Choosing a Dealer

On the topic of caution, the adage “all that glitters is not Gold” is worth remembering. Unfortunately, some claim to offer the genuine article but take advantage of their customers’ lack of experience to sell fake coins. It is possible to authenticate Krugerrands based on their size, weight, appearance, and magnetic properties combined with X-ray and ultrasound examinations. However, few purchasers could undertake such testing. Consequently, the safest option is to deal only with an established, accredited dealer in Precious Metals.

How Much to Buy

As a newcomer to the investment market, you may wish to confine your purchase to Gold coins alone. That’s fine but remember, while the long-term trend for the yellow metal has always been upward, you should not expect a return overnight. Like share prices, the value of Gold fluctuates and can sometimes drop. However, Krugerrands and Gold Bullion never exhibit the extreme fluctuations often seen on the stock market. If you plan a mixed investment portfolio, consider including 15% to 25% Gold as a hedge.

Where to Buy

Since authenticity is vital, it makes sense to purchase from one of the few dealers privileged to order Bullion coins directly from the Rand Refinery. Mr K is South Africa’s trusted source for “Pure and Precious Metals”. Feel free to inspect our extensive range of Krugerrands and Bullion Bars for sale.

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.