Krugerrand Celebrates 50th Anniversary As Top Bullion Coin
(Kitco News) - In 1967, personal wealth was given form after South Africa produced the first globally recognized gold bullion coin. 50-years later, the Krugerrand remains one of the most popular bullion products in the world.
According to production numbers from Rand Refinery -- which markets and sells the coin on behalf of the South African Mint -- in its half-century history, 60 million coins have been sold, making it the most traded gold coin in the world.
“Krugerrands are the most widely held gold bullion coins in the world - there are more in circulation than all the other gold bullion coins combined,” Rand said in a marketing report. “It is the easiest way for investors to own and trade gold.”
In a March interview with CNBCAfrica, Richard Collocott, executive head of marketing at Rand Refinery, noted that last year the Krugerrand regained the title as the world’s most popular gold coin, with global sales of $1.3 billion. Collocott has added that they expect to retain the top position in 2017 due to strong demand seen throughout Europe.
Collocott said that their biggest market is Germany, with investors buying the bullion coin because they see the value of holding physical gold as an important portfolio diversifier.
Precious metals analysts have noted that gold demand has been particularly strong throughout Europe as investors hedge against surging geopolitical uncertainty, in particular upcoming Brexit negotiations.
The World Gold Council noted that German bar and coin demand in the first three months of 2017 totaled 34.3 metric tonnes, a 13% increase compared to demand seen in the first quarter of 2016 and it strongest first quarter since 2011.
“[The Krugerrand] is a risk diversify. You shouldn’t put everything in gold but certainly there is an argument to be made for having a hard currency asset… something that isn’t dependent on the performance of the financial system,” said Collocott.
While the Krugerrand sees strong competition from other globally recognized bullion coins, specifically U.S. Mint American Gold Eagles and Royal Canadian Mint Gold Maple Leafs, Collocott said there are a couple of features that sets them apart.
What makes the Krugerrand stand apart from other gold coins is that it doesn’t have a face value. The coin’s value is based completely on the price of gold, he said. The Krugerrand is also made of 22 caret gold making it more durable than 24-caret gold coins.
“The Krugerrand doesn’t get scratched, damaged… Since 1967 we have produced 53 million ounces of gold in the form of Krugerrands and a lot of those original coins are still traded today,” he said.
“The addition of copper does not dilute the gold content, with each Krugerrand containing not less than the stated amount of gold for its size,” Rand said in its marketing material.