What is a South African Krugerrand

Gold IRA Frequently Asked Questions

What is a South African Krugerrand

There is no precious metal investor that hasn’t come across the term South African Krugerrand. So what is a South African Krugerrand this is the question I will answer here for you. 

What is a South African Krugerrand

A South African Krugerrand is a gold bullion coin produced in South Africa. The first Krugerrands produced were back in 1967. It was a co-operation between the South African Mint and a precious metals gold refining company. 

The reasons the South African government decided to mint bullion coins were to promote gold to the world, to support their booming gold mining industry, to promote gold to the world, and to make gold accessible to the public in general.

The krugerrand took its name from South Africa’s first Boer president Paul Kruger and Rand. Rand is the country’s basic unit of currency.

The coin depicts the face of Paul Kruger on one side and on the other side, it depicts the springbok, one of South Africa’s national symbols.  

The South African krugerrand is a gold coin designed to follow the price of gold. As a result, its price follows the price of gold.   

Krugerrand Facts

  • South Africa started minting gold bullion coins (Krugerrands) back in 1967
  • Krugerrands were massively produced in the 1980s
  • Krugerrands are still very very popular among gold investors
  • Not an aesthetically attractive coin but, an honest and durable coin meeting all bullion standards
  • Since 1967 over 50 million ounces of South African Krugerrands have been sold to investors and collectors
  • Krugerrand is considered to be a legal tender in South Africa

South African Krugerrand History

1967 was the year South Africa introduced Krugerrands to the rest of the world. Although in the US owning gold was illegal, the American government allowed its citizens to own foreign coins. As a result, Krugerrands became popular in the States. 

krugerrandIn 1971 most western countries started imposing sanctions against South Africa because of apartheid. Throughout the 1970s and 1980s most western countries one after the other imposed sanctions against South Africa.

In 1970 South Africa was the number one gold producer globally. In fact, South Africa mined over 75% of the yellow metal worldwide. It was an easy task for Krugerrands to become the number one investment choice for gold investors.  

In 1980 the South Africans introduced three more sizes of the bullion coin. They were 1/2, 1/4, and  1/10, a.of an ounce size. 

Krugerrand suffered from these sanctions. In 1985 the United States banned Krugerrand. In 1994 apartheid was abandoned and consequently, the west lifted its ban. By that time the Krugerrand had lost its place as the number one choice for investors. 

In 2000, investment gold became tax-free in the EU and the UK. Consequently, there was a demand increase for bullion bars and coins including Krugerrands.

During the 2008 financial crisis, Krugerrands became popular again among investors. The South African coin became popular worldwide and in the US until 2011. Those years investors bought millions of Krugerrand coins.   

 How are Krugerrands Manufactured

Krugerrands were designed to be tough. That is why they contain a small amount of copper. The coins are manufactured to weigh more than an ounce because an ounce of gold which is 91,67% of the coin and 8,33% of copper totals 1 and 1/11 ounces.

The copper added makes them tough and resistant to scratches compared with other gold coins that are made of pure gold. That toughness and durability are what make them so popular among gold investors. 

Krugerrands Huge Success

The krugerrand is by far the world’s most popular gold coin. Over the years It has sold over 50 million ounces of gold. In the 1980s it accounted for 90% of the world’s coin market. 

To grasp krugerrand’s huge success all we need is to take a look at the American Gold Eagle, an immensely successful coin that has sold over 20 million bullion in coins. That is well below the South African Krugerrand.

The Krugerrand Now

After the 1995 South African sanctions were lifted by the world, the krugerrand never fully recovered. South Africa is not the world’s leading gold producer anymore. As a consequence, the krugerrand doesn’t sell like hot cakes as it used to. However, in 2018 with investors flocking to buy gold, the Krugerrand became very popular again. 

The revived popularity of gold followed by the large increases in gold bullion prices led the South Africans to introduce the silver Krugerrand coin. That was in 2018. The Krugerrand silver coin has 99,9% purity and it has the same design as the original gold Krugerrand coin.     

Nowadays Krugerrands are still very popular among investors. They combine durability and are easy to store in small sizes. They appeal to both professional and private investors who want to invest in physical gold or silver. If you want to invest in Krugerrands make sure you do it through a reputable dealer.    

Investing in South African Krugerrands

Investing in gold is paramount for serious investors. That is because gold is a non-correlated asset and with gold, portfolio diversification can be achieved. 

The krugerrand is the coin you will find available in any gold broker together with the American Gold Eagle, the Canadian Maple Leaf, the Australian Kangaroo, the British Gold Sovereign, and many others. It is my favorite gold coin because it is different and because it is durable. 

Investors are buying physical gold because they want to safeguard their savings, protect themselves from the fluctuations of the dollar, protect their savings from geopolitical uncertainty and war, and to protect their savings from the oncoming economic crisis.

I hope my what is a South African Krugerrand post got you covered. If you have any further questions or queries feel free to write a comment and I will get back to you.

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Gold IRA Frequently Asked Questions

Gold IRA Frequently Asked Questions

In this Article, I will Answer all Gold IRA Frequently Asked Questions

Are Gold IRA’s Secure?

Gold is a physical possession. Because of this, there is always the chance of burglary. Even putting your gold in an insured vault does not suggest it can’t be taken through break-in or fraudulence. Make sure the business stores its gold in a legitimate depository, such as Delaware Vault or Brinks. Do your research and also make certain the depository where your precious metals are stored, fulfills your standards. You need to be certain your gold is safe and secure.

Is a Gold Individual Retirement Account an Excellent Investment?

Supplementing your profile with a small quantity of gold can be an excellent investment for some people. It’s a smart means to variety, yet you probably should not place your whole retirement plan into a gold IRA. Gold investments won’t pay dividends like supplies, but they’re a way to hedge your bets against the rising cost of living. Typically, talking, gold prices move in the opposite instructions from standard paper investments.

Some also see gold as a typical investment in a globe of extremely challenging cash actions. You’ll see ups as well as downs when looking at gold prices over the last couple of decades, yet they generally trend up, especially throughout an economic downturn. A perfect example of this was the 2008 monetary crisis– the marketplace started favoring gold when other financial investment returns were going down. A monetary adviser can aid you to choose where gold prices are heading at any kind of provided time.

What is a Gold Individual Retirement Account Rollover?

Gold IRA Frequently Asked Questions

A gold Individual Retirement Account rollover allows financiers to relocate their retirement financial savings into a gold-backed Individual Retirement Account. Brokers that help with rollovers execute the task and also keep your initial financial investments tax-free. Many brokers supply no-fee rollovers, so ask if you aren’t sure of their regulations. You can rollover the list below sorts of retirement accounts:

  • IRA
  • Traditional Individual Retirement Account
  • SEP or SIMPLE Individual Retirement Account
  • 401(k) or 403(k)
  • Pension.
  • TSP (Thrift Savings Strategies).
  • AnnRothuity strategies.

Can I Take Physical Property of Gold in my IRA?

No, you can’t take physical possession of gold in your Individual Retirement Account. It needs to be kept in an IRS-approved facility or bank. You could be based on high charges if you save gold from your Individual Retirement Account in your house. At the end of your IRA term, you can liquidate your gold possessions for cash money or acquire your gold scot-free.

Can I Utilize my IRA to Buy Gold?

You can convert your IRA funds by withdrawing them. Ensure you recognize the terms of your Individual Retirement Account before withdrawing funds, though. Some accounts are subject to charges or taxes for very early withdrawals.

Can I have more than one Individual Retirement Account?

Yes. You can keep a standard IRA as well as also open up a gold Individual Retirement Account or various other precious metal IRA.

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Can I Include Gold I Currently Have Right into my Gold Individual Retirement Account?

Regrettably, no. Even if your gold or other rare-earth element fulfills pureness standards determined by the IRS, including gold you presently have to your Individual Retirement Account violates Internal Revenue Service guidelines. Like other Individual Retirement Account accounts, gold IRAs call for custodians to handle the accounts, consisting of the handling of gold.

Gold and also other rare-earth elements in your gold IRA should fulfill IRS standards. You can buy antiques on your own and keep them, however not in regard to a gold Individual Retirement Account.

What is IRA-Eligible Gold?

Gold needs to fulfill certain requirements established by the IRS to be qualified for use in a gold IRA account. Qualified gold products satisfy minimum fineness requirements of 99.5% purity, are not considered very collectible, and also come from a U.S. mint or an approved international mint. According to the Federal Profession Payment, bullion metals are crafted right into pure bars or coins:

Gold bars: IRA-eligible gold can be found in pure 24-karat bars that evaluate anywhere from an ounce to 400 ounces. It has to have a trademark from a qualified refinery or assayer.

Gold coins: Gold bullion coins are produced for financial investment purposes. Know that proof coins– consisting of unusual coins– are for gathering, not spending.

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Investing in Gold and Coins – 2020

Investing in Gold and Coins - 2020
Gold Bar

Investing in gold and coins could be a headache for the new investor. There are many ways to invest in gold but not all of them are recommended. In this article, I will present to you all ways of gold investing and I will explain why investing in physical gold is the best way to invest in gold and coins.

In today’s economic environment, it is crucial for the investor to have part of his/her portfolio invested in gold. In these troubled times, there should not be an investment portfolio that does not include gold.

Gold in the Past and Gold Now

In the past, humans used gold as a way to facilitate trade and to accumulate and store wealth. In particular, there was a gold standard policy where early paper currencies were generally backed by gold with every printed bill corresponding to an amount of gold held in a vault. This approach to paper money lasted well into the 20th century.

Nowadays the gold standard policy has been replaced by fiat money therefore, the link between gold and paper money has long been broken. Nonetheless, investors and central banks, still consider the yellow metal a paramount investment tool. For example, central banks still own huge amounts of gold.

Who Buys Gold?

It is not only investors who buy gold. In fact, 50% of gold demand comes from jewelry. People love to wear gold.

Another 40% comes from direct physical investment in gold bullion, gold bars, and coins, including all collectible numismatic gold coins, medals, and so on. Physical gold investors include central banks and individual investors. The Chinese and Russian central banks are some of many central banks who invested in physical gold recently.

Gold is considered to be a safe haven asset. Every time there has been political and economical instability, gold has been called upon to save the day. When a paper currency loses its value and global inflation starts rising, gold offers security and acts as a safe haven for the investor.

Last but not least, industrial demand for gold is on the increase, especially in technology. Computers have gold and so do mobile phones. Gold is also used in electrical appliances, medicine, and so on.

Reasons to invest in gold

  • To protect and preserve wealth from unexpected events.
  • A hedge when the stock market is not expected to do well.
  • Portfolio diversification.
  • The weak dollar
  • Loss of confidence in central banks
  • Geopolitical uncertainty (Middle East, Brexit, ISIS, North Korea, Hong Kong.)
  • The US-China trade war.
  • The covid-19 caused recession
  • Low or negative interest rates
Black Monday1987 Iraq-Kuwait War1990 Dot Com Crash2001 Financial Crisis2008
Stock Market Decline -38.9 -22.5 -27% -34%
Gold Price Results +5% +7.5% +1% +5%
Gold Outperformed Stocks By Ratio 45:1 31:1 29:1 40:1

Investing in Physical Gold

Gold Bullion Bars

Gold bullion bars are a popular way to invest in gold. They are available in various sizes, 12kg, 1kg, 100gr, 50gr, 10gr, 1gr, etc. Gold bullion bars must be certified for weight and purity. A serial number is attached to all certified gold bars for security purposes. Bars purity must be 99.5% (24 karats) at least, whereas there is a number of manufacturers producing bars at 99.9% purity. (24 karats too)

Gold bars can be sold easily at any given time. However, it is best to own smaller size bars rather than the 12 kg or 400-ounce bar. Imagine, owning a 400-ounce bar and want to sell it. It’s not easy to find an investor willing to fork out $650,000 overnight. If you want to liquidate 10% of it you can’t exactly saw off 10% and sell it. The best option is to own smaller size bullion gold bars, as most gold investors do. They offer much better liquidity.

Gold Bullion Bars Pros

  • Direct exposure
  • Tangible ownership
  • High liquidity (small size bars)

Gold Bullion Bars Cons

  • Markups
  • Storage

Gold Coins

Investing in Gold and Coins - 2020

Gold bullion coins is another popular way to invest in gold. Bullion coins are priced according to their fine weight plus a small premium, based on supply and demand, as opposed to numismatic gold coins, which are priced mainly by supply and demand, based on rarity and condition. If you are willing to invest strictly in gold, focus on widely circulated coins and leave the rare coins to collectors.

Bullion coins are mostly minted in smaller than one-ounce sizes, making them a more convenient way to invest in gold compared to larger bars. Reputable dealers can be found almost anywhere, even your local bank might be able to help you.

Gold Bullion Coins Pros

  • Direct exposure
  • Tangible ownership
  • High liquidity

Gold Bullion Coins Cons

  • Markups
  • Storage

Gold ETF’s and Mutual Funds

Gold exchange-traded funds, (ETF’s) is an interesting way to invest directly in gold. Each share of these specialized tools represents a fixed amount of gold, such as one-quarter of an ounce. These funds can be purchased or sold like shares, in any brokerage. This is a simple and cost-effective way to invest in gold, especially for small investors. ETF funds hold gold bullion as their own asset therefore, you will not have to actually store your own bullion.

Mutual funds hold gold bullion and actually own gold companies. They are part of their own investment portfolios. Investors should be aware, only a few mutual funds focus solely on gold investing. Most of them own a number of other commodities, which have nothing to do with gold.

Gold ETF’s and Mutual Funds Pros

  • Direct exposure
  • Highly liquid
  • A simple way to own gold
  • Low cost
  • Suited for small investors

Gold ETF’s and Mutual Funds Cons

  • Fees
  • No upside beyond gold price changes

Gold Jewelry

Investing in Gold and Coins - 2020
Gold Jewelry

If you believe that, because you possess a lot of gold jewelry, you own a small fortune, then you are wrong. In jewel manufacturing the amount of gold is small. The purity of gold is measured in carats. The purest amount of gold you can find is 24 carats. However, in jewelry 14 or 18 carats is common. Keep in mind, a low amount of gold in jewelry does not mean that it is not good enough, as gold in its purest form (24 carats) could bend or deform quite easily.

From an investor’s point of view, jewelry will not reward you with high profits, as retail markups are up to 400% regarding gold’s value. However, bargains can be found at auctions or estate sales. This way you avoid the retail markup.

Gold Jewelry Pros

  • Gold jewelry makes you feel good

Gold Jewelry Cons

  • Mediocre gold investment

Investing in Paper Gold

Gold Futures and Options

Investing in Gold and Coins - 2020

 

Gold futures are contracts to buy or sell a particular amount of an item (gold) on a given date. Futures are traded in contracts, not shares, and represent a predetermined amount of gold. Some contracts settle in dollars, while other contracts may settle in gold. As a result, the investor has to be very careful. Futures are suited to the experienced investor.

Options are also another way to invest in gold. They give you the option to buy a future contract, without having to pay the contract outright. Instead, you will have the option to buy the futures contract at a preset time frame and price. An option might reduce losses to the price paid but, a futures contract based on a margin might require more capital than originally invested, in case of losses mount quickly. Options are also suited to the experienced investor.

Gold Futures and Option Pros

  • Highly liquid
  • Small upfront capital investment to control a large quantity of gold
  • Low commissions

Gold Futures and Options

  • Indirect gold exposure
  • Time-limited contracts
  • Need to be a financial expert

Gold Mining Company Stocks

Investing in Gold and Coins - 2020
Gold Mine

Another way to own gold indirectly is to invest in gold mining and refining companies. You can do that by purchasing their shares. If gold’s price rise, so will their profits and the value of your shares will follow. Simple as that. However, you have to be thorough and diligent when selecting which gold mining company is worth investing.

Mines are commercial enterprises, with problems such as flooding, subsidence, structural failure, mismanagement, negative publicity, nationalization, theft, and corruption. Such factors can lower the share value of mining companies.

Gold Mining Stocks Pros

  • Usually, track the gold price
  • You may get dividends

Gold Mining Stocks Cons

  • Indirect gold exposure
  • Mine operating risks
  • Exposure to other commodities

What is the Best Way to Invest in Gold?

As you can see there are many ways to invest in gold. They all have their advantages and disadvantages. If you want to invest small, then gold ETF’s could be best for you. You can also invest in gold coins and keep them safe somewhere at home.

For those who are willing to invest a large amount of money into gold, the best will be to invest in bullion bars and coins. Direct gold ownership is best because it has the ability to track gold’s performance. Most investors feel better when owing a tangible asset stored at an independent private facility.

If you are an aggressive and experienced investor with direct access to the markets, the gold futures and options market could be best for you. Beware though, the risk is high, so are the profits and losses.

Mining stocks are also an interesting way to invest in gold. Jewelry though isn’t worth considering at all.

Final words

Investing in gold offers several benefits including portfolio diversification and protection from unexpected events. A prudent investor always includes gold in his portfolio, usually around 10%.

There is no one size fits all investment however, you are now armed with the knowledge on how the industry works, and all you need to do now, is to consider all the available options and make the decision that’s right for you.

During these troubled times, ordinary folks have seen their life savings decimated. It is imperative for an investor to diversify his/her IRA investment in order to protect it. A Self Directed gold IRA investment could safeguard and protect your savings.

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What is Gold Bullion Definition

What is Gold Bullion Definition

What is gold bullion, and what are its characteristics?  Bullion is gold bars, silver bars, or other bars, or ingots, of precious metals.  The word bullion comes from the French Minister of finance Claude de Bullion.  The value of the bullion is determined by the value of the precious metal content, which is defined by its purity and mass.

The specifications of bullion is regulated by market bodies or legislation. In the European Union, the minimum purity for gold bullion which is treated as investment gold with regards to taxation, is 99,5% for gold bars and 90% for gold coins.

The price of gold bullion is influenced, by demand from companies who use gold to make jewelry, and other products, and by perceptions of the overall economy.  For example, political, or financial instability, affect the price of gold bullion.

-How To Buy Gold Bullion Online

-How To Buy Gold Bullion Online

-How To Buy Gold Bullion Online

After lots of thinking and researching, you decide to go ahead and buy gold.  The big question is: how to buy gold bullion online?  Let me tell you, investing in the metal has never been easier with hundreds of online companies offering to sell gold coins or bars.

Before you go ahead and buy your gold, you will have to decide just how much of your portfolio will be allocated to gold.  The answer to that is: at least 10% of the total portfolio.  Bare in mind, I am talking at least 10% invested in tangible gold, (bullion coins and bars) not ETFs, gold stocks, or paper investments related to gold.

Many investors ask what percentage of their financial assets, should be in precious metals.  Well, there is the four part approach: gold, bonds, equities, and cash, at levels of 25% each.  However, this can change.  Some investors who are really concerned about the financial system have 60% to 100% in gold together with some silver.  If you have a 10% of your portfolio in gold, it can be enough to protect your investment.  It is up to the investor, what percentage of his/her portfolio will be allocated to gold.

The next step is to decide, what is best for you, gold bullion coins or gold bullion bars.  For the small investor coins, in my opinion, are a much better investment.  Let me tell you though, with a gold coin you cannot go to the supermarket and buy groceries.  Precious metal coins are the most liquid way to own bullion.

They are minted by governments and that makes them hard to counterfeit.  In addition, coins are easy to cash in and trade.  Do not get me wrong, gold bullion bars are a great way to invest,  but they carry high premiums, (commissions) unless the buyer invests in a multiple ounce bar.  Depending on supply and demand, premiums can fluctuate from 1% to 10%.  In this case the investment is worthwhile due to the very low premiums.  The problem is that a multiple troy ounce bar (1 kilogram) is difficult to liquidate.

Which coins to buy?  The most popular coins are the following: English Sovereign, British Britannia, American Eagle, American Buffalo, Australian Kangaroo, South African Krugerrand, and the Austrian Philharmonic.

You can also buy bullion bars, you have to make sure the refinery is an LBMA approved refinery therefore, you are getting what you’ve paid for.  Something else you will have to consider is storage, if you keep your gold bars in your own home, chances are they will need to pass an assay, before an investor considers buying them.  Assay, is a scientific examination on the amount of gold they contain.  To avoid all that best is your bullion bars to be stored at a secure storage company.

Under no circumstances you are to accept storage inside the banking sector.  This way you eliminate all chances of having your gold confiscated.  At the same time you will have to make sure your gold is stored under your name, and not under the dealers name.  You will also need a storage certificate under your name too.  This way you are protected in case your gold dealer goes bankrupt.  Make sure you have direct access to the vault, without a third party present. 

Furthermore, you need to select a reliable gold dealer.  Check out the comments regarding the firm especially the complaints, see how these complaints were handled.  If the there is a long list of complaints, then this is a sign to worry.  Also check the number of years the company operates, you want ten years of solid record.  Finally most important is to choose a firm with a commitment to keeping you informed.  Keeping you informed now and in the future.  If a sales person gives you a short shrift, or hits you with a high sales pitch, then this is bad news.

Finally, when you buy coins make sure you have them delivered to you.  They are your own property and you should not let third parties hold your precious metals on a permanent basis.  Good luck, and good fortune with your gold investment.