Exploring the Historic Value Growth of South African Krugerrands

When South Africans think of Gold coins, Krugerrands are invariably the first to come to mind. It is also a rewarding investment opportunity for those who are new to the investment market and are considering buying Gold. In practice, the Precious Metal is respected and coveted worldwide for its beauty, value and long, rich history as a part of human culture that has endured for millennia. The first coins to contain Gold appeared sometime around 650 BC. A mere hundred years later, during the reign of Lydia’s King Croesus, the first coins to be struck from pure Gold followed.

Krugerrands’ Increasing Rise in International Demand

When iconic Krugerrands was first minted in 1967, it was a government initiative to promote sales of the Precious Metal in a format that was more accessible to South African citizens. Furthermore, granting the world’s first one-ounce-denominated Gold coin legal tender status meant it was exempt from VAT. Despite an embargo on South African products by many western nations during the ‘70s and ‘80s, it has since become a worldwide phenomenon. More than 59 million Krugerrands have been minted to date, most of them destined for the international market.

However, it is not the coin’s design or origin that accounts for the high demand but the consistency with which the value of Gold has grown. If one examines the spot price of the yellow metal over the past two decades, it is not hard to see why it attracts so many investors. Anyone who purchased a single Troy ounce Gold coin in 2000 would have paid around R3 000. Selling it in 2007 would have realised a profit of around R2 000. However, if they had waited a further two years to sell their Krugerrands, the Gold spot price reached R10 000, and their profit would have been closer to R7 000.

Gold Bullion as a Reliable and Rewarding Investment

However,  the metal’s upward progress didn’t end there. By the middle of 2020, the spot price was approaching an all-time high of approximately R33 000 per Troy ounce. Several factors influence the Gold price. Although driven mainly by supply and demand, currency fluctuations, especially in the US dollar, trade deficits, inflation and political unrest can all influence the spot price. Therefore, it is undeniable that, on occasion, even the value of Gold Krugerrands can fall.

The first major setback came just after the price peaked when the pandemic restrictions kept people at home and unable to visit Bullion dealers. The sudden drop in demand for the metal saw its price fall to late 2019 levels. However, over the next twelve months and the gradual return to normality, it recovered almost half of its loss, and its upward climb has continued as usual. Today, in line with many other businesses, many Bullion dealers now offer investors the opportunity to shop for Gold bars and Krugerrands online, thereby ensuring a renewed growth in demand.

History has shown that, although Gold price fluctuations occur, these are minor compared with those in the stock market. When other investments are failing, Gold is the perfect hedge. Waiting it out will always guarantee a profit.

So, how to get started? Visit Mr K, one of the few registered dealers permitted to purchase directly from the Rand Refinery. You can shop our range of Krugerrands by clicking here.

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.