South African Krugerrand Gold Bullion Coin
Fineness: .9167 Actual Gold Content:
1.0 troy ounce (31.103 grams)
Diameter: 34 mm (also minted in 1/2,
1/4, 1/10 ounce sizes)
Gold Krugerrands were the first gold
bullion coins produced in exact 1-ounce
size, and sold for simply the spot gold
price and a slight mark-up to cover
manufacture and distribution. Here was
a way for people to buy tradable quantities
of gold, without having to buy big bars
of gold bullion or odd-weight gold coins
that you had to get out a calculator
to figure out their value. (Krugerrands
are commonly misspelled as Krugerands.)
Gold bullion coins got their start in
1967 when South Africa introduced the
Krugerrands. South Africa is the largest
producer of gold in the world, and the
Krugerrands helped the country to market
the vast stores of gold coming out of
the deep mines around Johannesburg.
The convenience of a legal tender gold
bullion coin, exactly one ounce of pure
gold, guaranteed by a government Mint
for weight and purity, made The Krugerrands
the predominant way for individuals
to buy gold bullion in the 1970's. With
the demise of gold as legal tender coins
in the first half of the 20th Century,
the only gold struck came to be special
presentation pieces and collectors issues,
not the old fashion gold-for-money's-sake
gold coins as had been produced for
thousands of years prior. Gold-for-gold's-sake
was pretty much bullion bars, a form
of gold whose ownership was restricted
in the United States from 1933 to 1975.
Gold coins came to mean coins of numismatic
or collectors value, coins which traded
for prices far in excess of their gold
value. The South African Government
changed that with the introduction of
the Krugerrands in 1967. Here was a
coin, with legal tender status, purposefully
made to trade just for its gold value
and the small cost of manufacture and
distribution. South Africa foresaw that
gold ownership would become increasingly
popular among private individuals as
the U.S. dollar was no longer a fixed
amount of gold. With the weakening of
the dollar, the monetary standard of
the world was changing, and gold would
play a growing part in those changes.
The South African Krugerrands made gold
ownership simple by providing a one
troy ounce unit of gold that was easy
to buy and sell all over the world.
Instead of odd-weight bars of gold,
the market for private gold owners now
had the convenience of mass-produced
bullion coins.
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