In 1967, the South African Mint began making the gold Krugerrand to help move the output of its mines, and to facilitate private ownership of gold. When I began in this business in fall of 1977, the K-Rand was all we had to sell, other than US gold coins, which were really not too good a product, as millions of counterfeit U.S. gold coins were being turned out by communists in several nations. The fake U.S. $20 gold coins were made of real gold, but inspection with a jeweler’s loop showed that while they may have been real gold, not a collectable, and overpriced. Over the years, all the fake ones have been melted down, and are extinct. The Krugerrand was real, and an actual non-collectable, cheap way to buy gold for its value in gold, not over-priced because of date or condition. I have sold thousands of them. When I started, gold was $160 and silver $5.
For the first two years of production, the mint produced only 40,000 per year, and by the time I entered the field, six million a year were being produced. When apartheid (pronounced apart-ate) ended in 1989, production slumped to a bit over 23,000, and that year is highly collectable today. Between 1974 and 1985, over 22 million were imported into the U.S. alone. With competition of other gold coins, the K-Rand production has never equaled that of the 1980-1985 period. Costs to make the K-Rand have increased because South African gold mine production has decreased every year due to increased depths in mines necessary to get gold. The mines are so deep now that temperatures often times reach 160 degrees, and miners can only work a short time.
Paul Kruger was a four term president of South Africa, so the “Kruger” in Krugerrand, is from him. His likeness is on the front, and the obverse is an engraving of a springbok antelope. The “Rand” is the South African currency, so the Krugerrand in South Africa, translated into U.S. as a comparison, might be “Washington Dollar.” Kruger died believing the earth was flat, so his intellectual knowledge wasn’t great. The K-Rand weights 1.09 ounces. It has .09 ounce of copper, and one ounce of gold, making the coin difficult to scratch or dent. The K-Rand was priced in 1977 at about $200, and I used to carry one in my pocket, until I lost it, which ended that practice. The K-Rand comes in ½, ¼ and 1/10th ounce sizes.
Until 1980, the K-Rand was all we had to sell. They came from South Africa in a heavy black plastic box of 300, with two seams running down the center, leaving three sections, each holding 100 coins. I have several dozens of those boxes and they are very handy for holding parts and things in my shop. The boxes have no marks or ID on them identifying their contents, to avoid theft I am sure. My supplier imports them in lots of 3,000 from South Africa currently.
The K-Rand is a ‘bullion’ coin, like the others we have on our web site. The term ‘bullion’ simply means a price as close to the spot price as is possible. We carry only bullion products, and not ‘numismatics’ which are coins graded as to their age and condition, which too often are scams or very poor deals for the consumer. “Rare coin dealers” won’t touch bullion coins, as they can’t charge for the gold content, but age and condition, which is to me, like being a used car salesman. “This belonged to a little old lady who only drove it to church on Sunday,” or maybe, “This coin has not been professionally graded, but that isn’t necessary, as you can see how beautiful and clear it is.”
Have you noticed that on the TV commercials, the advertisers never show a Better Business Bureau logo on their commercials? Think about it. (No more political columns, as they do no good and change nothing. We are in the precious metals business, so my columns will be about economics from now on.) – Don Stott