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 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 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 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.

 

 

 

 

Investing In Gold And Coins

Investing in gold and coins

Investing in gold and coins is something most people have actually thought about at some point in their lives.

Investing in Gold and Coins

Reasons to invest in gold

People invest in gold for their own reasons.  Some do it to preserve their own wealth, there are others who do it to actually increase their wealth, and many managed it in the past with much success.  There are many reasons to invest in gold, and in this chapter, I will present them to you.

Unlike paper currency or other assets, gold has a history of holding its value.  People like to invest in gold because they see gold as a way to preserve their wealth from generation to generation.  In reality, gold is a hedge against inflation. The limited supply of gold combined with the increasing demand in countries such as India and China is another factor that influences the price of gold.

In addition, gold is a hedge against geopolitical uncertainty, and my word our times are troubled times. Furthermore, portfolio diversification along with the weak dollar are two very important reasons for the investor to put his money into gold.

How to invest in gold

In the old days, there was only one way to invest in gold and that was only by acquiring gold itself, mainly in the form of jewelry and gold coins. During the centuries there have been many changes and nowadays, the investor faces a very difficult task, due to the fact that there are many options available.  In this post, I intend to inform the investor on the ways he, or she, can actually invest in the safe haven gold.

Direct ownership, in my opinion, is the best way to invest in gold.  Why?  There is nothing like pure gold in your hands, it is certainly better than money.  Its value cannot be changed or controlled by governments and that is the reason for governments to go off the gold standard.

Investing in gold bullion bars?

A gold bar is a quantity of fine metallic gold, that is manufactured by a bar producer meeting the exact standard conditions, such as labeling and record keeping.

Bars are the most traditional way of investing in gold.  In many countries, they can be bought directly through banks.  Bars are available in various sizes, 12kgr, 1kgr, 100gr, 50gr, 10gr, 1gr, etc.

The standard gold bar held as gold reserves and traded as such by the central banks is the 400-troy-ounce. (12.400 or 438,9 ounces).  The 1000gr bar or the kilobar is the most popular bar among investors, and it is used extensively for trading and investment. The premium of these bars when traded, is very low over the spot value of the gold, making it ideal for small transfers between banks and traders.

Nevertheless, the bar’s purity must be at 99.5%  (24 karats) at least, whereas there are a number of manufacturers producing bars at 99.9% purity. (24 karats too)

Investing in gold bullion coins?

Bullion coins are coins made out of precious metals with one purpose only, that of investment or store of value, rather than used in day-to-day commerce.  Many countries have their own bullion coins such as the British sovereign, produced by the British, the American Eagle series of coins available by the U.S. mint, and many others.

Bullion coins are produced in many different weights.  They are usually in fractions of one troy ounce, but some bullion coins are produced in very limited numbers in kilograms or more.  Bullion coins are usually available in gold and silver, with a couple of exemptions, (the Krugerrand, and the Swiss Vreneli) which can only be found 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.

Bullion coins sell, for a premium over the market price of the metal on the commodities exchanges.  This premium is due to the underlying demand for bullion coins, their small size, and the costs of manufacture.  In addition, the amount of bullion varies depending on the coin’s type, weight, and precious metal.

Other ways of investing in gold

Gold options and futures currently trade on various exchanges around the world and over the counter directly in the private market.  They are suited to the sophisticated and experienced, who can speculate on price movements in either direction.  The risk is high, and so are the profits and losses too.

The companies that produce the gold themselves as shares in gold mining companies.   If the gold prices rise, so will the profits of the gold mining companies, and as a result, the share price will also rise.   However, there are certain risks here an investor has to take into account.  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 exchange-traded Funds (ETFs) are a very interesting way to invest in gold.  An E.T.F. is a type of mutual fund, that trades on a stock exchange like an ordinary stock.  The E.T.F.’s exact portfolio is fixed in advance and does not change, therefore the E.T.F. holds gold bullion as its own asset.  E.T.F. offers a practical way to invest and hold gold.

Investing in gold IRA’s

A gold IRA investment is an individual retirement account, an account that functions the same way as a regular IRA account however, instead of holding paper assets, it holds physical bullion coins or bars.

Gold is the type of investment that can protect you when times are hard, and at the same time will also offer significant gains to your nest egg.  Back in 2001, an ounce of gold cost $271,00.  Ten years later it reached $1896,00, an increase of almost 700%.   During that time, banks and currencies collapsed, and the real estate market collapsed, but gold didn’t.  In particular, gold fed from these calamities, was the rediscovered idol, in the time when everything else collapsed, from mortgages, credit default swaps, and derivative products, too complicated to even understand.

As you can see, a standard IRA, an IRA invested totally in stocks bonds and other funds are actually putting your hard-earned money at risk.  You are relying on government, weak currencies, economies, and large corporations.  Gold and silver can actually safeguard your investment.

Since the 2008 financial crisis, gold IRAs have become very popular.  Record gold sales, combined with the appearance of many more, that simplify the transaction, have made investing in an IRA a one-shop stop.  The result is robust IRA growth.

Nowadays, it is absolutely necessary for the investor to invest a portion of his/her savings in gold, as the dollar is still weak, there is geopolitical uncertainty, the country’s (US) trade deficit is out of control, and the potential inflationary impact of the Federal Reserve’s, stimulus programs.

How does it work?

It works the same way as a regular IRA account, however, instead of holding paper assets, it holds physical bullion coins or bars.

Investing in gold and coins should not be taken lightly. Do your own research and make sure you invest in gold the right way the way that suits you more.

Choosing the Right Gold Broker

Choosing the right gold broker is always a difficult decision.  It doesn’t matter where an investor is prepared to invest, it is absolutely necessary to research and make sure his/her hard-earned money doesn’t go to waste.  In order to ensure the above and at the same time maximum earnings, it is important for you to read this page.

Selecting the appropriate broker

Check out the comments regarding the firm, especially the complaints, and see how these complaints were handled.  If there is a long list of complaints, then this is a sign to worry about.  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 salesperson gives you short shrift or hits you with a high sales pitch, then this is bad news.

LBMA members

The LBMA (London Bullion Market Association) is the competent authority for the world bullion market, and the Bank of England oversees it. It is imperative for the bullion to be produced by an LBMA-approved refinery.  This way, the gold bullion coins or bars meet the standards set by the LBMA.  In a few words, you are getting what you’ve paid for.

Direct storage outside the banking system

Storage of bullion should be outside the banking system, this way the possibility of confiscation due to bank bankruptcy (bail-ins), or government confiscation is eliminated. Storage should be direct to the client’s name with no intermediates.  This way there is no risk of the investor losing his/her investment, in case the broker goes bankrupt.  The investor should be provided with a storage certificate by the independent storage company.

Buyback, shipping, and pickup services

The gold firm should be able to provide the client with several important services that include:  a buyback service a pickup service, and a shipping service as many clients would prefer their gold kept at home.  At the same time it is important for the dealer to be accessible to its client’s questions and queries, and give answers and solutions promptly.

Vault location

The location of vaults is very important.  A vault should be located in a free trade zone to avoid taxes or duties.  There are many trade-free zones in the world, and most vaults are located there.  (Singapore, Toronto, Switzerland, New York, etc.)

I hope my post on investing in gold and coins has got you covered. If you still have any questions feel free to let me know in the comment section.

 

 

-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.

-What Is Gold Bullion Coins

Millions of people from all over the world are investing in gold bullion coins.  So what is gold bullion coins and why people actually put their money there?  Bullion coins are coins made out of precious metals with one purpose only, that of investment or store of value, rather than used in day to day commerce.  Many countries have their own bullion coins such as the British sovereign, produced by the British, the American Eagle series of coins available by the U.S. mint and many others.-What Is Gold Bullion Coins

Bullion coins are produced in many different weights.  They are usually in fractions of one troy ounce, but some bullion coins are produced in very limited numbers in kilograms or more.  Bullion coins are usually available in gold and silver, with a couple of exemptions, (the Krugerrand,and the Swiss Vreneli) which can only be found 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.

Bullion coins sell, for a premium over the market price of the metal on the commodities exchanges.  This premium is due to an underlying demand for bullion coins, their small size, and the costs of manufacture.  In addition, the amount of the bullion varies depending on the coin’s type, the weight, and the precious metal.