Krugerrands - Advice on buying and selling krugerrands

Krugerrands offer a simple and straightforward way for you to invest some of your money into gold, since they are an official gold bullion coin containing 1 ounce of fine gold.

Krugerrands always have a value based on the price of gold, which may increase or decrease, and they also may have an additional value to coin collectors depending on their rarity and condition.

The krugerrand is a very well known gold bullion coin, and it is also available in smaller sizes, with a half krugerrand, quarter krugerrand, and 1/10th of a krugerrand containing half an ounce of gold, a quarter of an ounce of gold, and a tenth of an ounce of gold respectively.

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The Krugerrand

The krugerrand is a South African gold bullion coin that was first produced in 1967 and is a legal tender gold coin, meaning that it can be used as currency to pay for goods or services.

Because the value of gold can fluctuate quite markedly the krugerrand was not issued with a face value, rather its purchasing power as a legal tender coin is based on the market value of gold at any given time. Because gold prices change constantly, krugerrand prices change constantly also.

This is to address the problem that otherwise the coin could sometimes have a face value in excess of its gold content, and other times it may have a value worth far less than its gold content value.

The Krugerrand weighs 33.93 grams and is made of 22 ct gold, which is 91.67% pure. Although the krugerrand contains 1 ounce of gold, it actually weighs more than one ounce.

This is because of the addition of other metals to make the gold alloy harder, and the coin more durable - 24ct gold is just far too soft for use in gold coins.

Why buy krugerrands?

Gold has always been a way to protect the value of money, since gold is in limited supply (it cannot be manufactured), and it is accepted worldwide as a form of payment, and as having value. This means that even though the price of gold may fluctuate, over time the value of gold generally increases, while the value of currency may be eroded by inflation and other economic factors.

It is for this reason that when we enter a recession or economic downturn many people invest in gold as a way to protect the value of their money or savings.

One thing to bear in mind whether you buy krugerrands or any other form of gold coin is that you will always pay a slight premium over the market value of gold when you buy, and you will always recieve slightly less than the market value of gold when you sell.