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What Are Krugerrands and What Do They Mean?
Krugerrands are gold coins established by the Republic of South Africa in 1967 to aid in the advancement of South African gold on worldwide markets and to allow citizens to possess gold. They are one of the most popular and widely traded gold coins on the international market.
Krugerrands were created with the sole purpose of deriving their worth from the gold price at the time they were traded. The price of Krugerrands fluctuates in tandem with the price of gold.
Key Points Briefly
Krugerrands are gold coins manufactured in South Africa since 1967.
In 1980, when the gold market was at its pinnacle, Krugerrands constituted for 90% of the global gold-coin market.
Despite South Africa's declining gold production, they continue to thrive among investors.
Krugerrands are a type of gold coin
Paul Kruger, the leader of the South African Republic from 1883 to 1900, was the face of a Krugerrand coin when it was launched. The name was derived from two names, the first name of Paul Kruger and the second name was of the South African currency Rand. AT the back of the coin was the symbol of an antelope, that is South Africa’s main symbol.
Krugerrands are operated on the Johannesburg Stock Exchange (JSE) in a well-structured secondary market, just like any other listed equities market asset, with market price based on the weight of the coins. The South African Reserve Bank issues new Krugerrands.
The Krugerrand was produced to be more resistant to wear than the 24-karat gold coins used for decorating medals because of its legal tender status in South Africa. The Krugerrand is constructed of 22 karat gold (91.67%) and an 8.33 percent copper alloy.
Following the end of apartheid in 1994, Krugerrand production fell. South Africa's gold production has recovered since then, although it has never reached the heights of the 1970s and 1980s. South Africa's gold output had decreased by 85 percent since 1980, and the country produced only 6% of the world's gold in 2016.
Krugerrands are still in trouble today. South Africa's gold production plummeted by more than 30% between December 2018 and December 2019, prolonging the country's longest period of contraction since the 2007–08 financial crisis, as shown in the graph below.
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