Krugerrand

Krugerrand Gold Bullion Gold Coins Investments Precious Metals South African Mint
A gold bullion coin minted by the Republic of South Africa containing one troy ounce of gold. The Krugerrand is frequently traded and widely recognized.
On this page

Definition

The Krugerrand is a gold bullion coin minted by the Republic of South Africa. It was first introduced in 1967 with the intention to promote South African gold. Each Krugerrand contains precisely one troy ounce of gold. The coin is highly recognizable and widely traded around the world.

Examples

  1. Investment Purpose: Investors purchase Krugerrands as a hedge against inflation and to diversify their portfolios.
  2. Collector’s Item: Some numismatists collect Krugerrands due to their historical significance and intrinsic value.
  3. Gifts and Keepsakes: Krugerrands are sometimes given as gifts to mark special occasions such as anniversaries or graduations.

Frequently Asked Questions

1. What is the difference between a Krugerrand and other gold bullion coins?

The main difference lies in its composition and historical background. A Krugerrand contains one troy ounce of gold and carries a small amount of copper, which makes it more durable.

Yes, Krugerrands are considered legal tender in South Africa, though they are not typically used for commercial transactions due to their gold value.

3. How is the value of a Krugerrand determined?

The value of a Krugerrand is primarily based on the price of gold. The market price fluctuates along with the global gold market.

4. Is there a silver or platinum Krugerrand?

Yes, there are also silver and platinum Krugerrands, though the original and most popular version contains gold.

5. Where can I buy Krugerrands?

Krugerrands can be purchased through various dealers, bullion exchanges, and sometimes at banks or financial institutions specializing in precious metals.

  • Bullion: Precious metals in bulk form, such as bars, ingots, or coins, sold primarily for investment purposes.
  • Troy Ounce: A unit of measure for precious metals equal to approximately 31.1035 grams.
  • Numismatics: The study or collection of currency, including coins, tokens, paper money, and related objects.
  • Inflation Hedge: An investment that is considered to protect against the decreased purchasing power of a currency.

Online References

Suggested Books for Further Studies

  1. “Gold and Silver Bullion Investing: A Smart Guide to Preserving Wealth through Precious Metals” by Michael Maloney
  2. “The New Gold Standard: Rediscovering The Power of Gold to Protect and Grow Wealth” by Paul Nathan
  3. “The Contest for the Delaware Valley: Allegiance, Identity, and Empire in the Seventeenth Century” by Mark E. Lender

Fundamentals of Krugerrand: Investments Basics Quiz

### What year was the Krugerrand first introduced? - [x] 1967 - [ ] 1971 - [ ] 1980 - [ ] 1991 > **Explanation:** The Krugerrand was first introduced in 1967 by the South African Mint to promote South African gold. ### How much gold content does a standard Krugerrand coin contain? - [x] One troy ounce - [ ] Half a troy ounce - [ ] One gram - [ ] Two troy ounces > **Explanation:** A standard Krugerrand contains exactly one troy ounce of gold. ### What metal is combined with gold in a Krugerrand to enhance durability? - [x] Copper - [ ] Silver - [ ] Platinum - [ ] Nickel > **Explanation:** Copper is added to the Krugerrand to make it more durable and resistant to wear and tear. ### Are Krugerrands considered legal tender in South Africa? - [x] Yes - [ ] No - [ ] Only for large transactions - [ ] Only for international trade > **Explanation:** Krugerrands are considered legal tender in South Africa, though they are rarely used in everyday transactions due to their gold value. ### What primary factor determines the market value of a Krugerrand? - [x] The global price of gold - [ ] Its face value as currency - [ ] Its production cost - [ ] Its historical significance > **Explanation:** The market value of a Krugerrand is primarily determined by the global price of gold. ### Which organization is responsible for minting the Krugerrand? - [x] South African Mint - [ ] United States Mint - [ ] Royal Canadian Mint - [ ] Perth Mint > **Explanation:** The South African Mint is responsible for minting the Krugerrand. ### Can Krugerrands also be found in silver and platinum editions? - [x] Yes - [ ] No - [ ] Yes, but they are no longer in production - [ ] Only as collector's editions > **Explanation:** Besides the gold version, Krugerrands are also available in silver and platinum editions. ### For which main purpose are Krugerrands typically purchased? - [x] Investment - [ ] Everyday transactions - [ ] Industrial use - [ ] Art collection > **Explanation:** Krugerrands are typically purchased as an investment, often as a hedge against inflation and to diversify portfolios. ### Where can you typically purchase Krugerrands? - [x] Bullion dealers and exchanges - [ ] Grocery stores - [ ] Gas stations - [ ] Pharmacies > **Explanation:** Krugerrands can be purchased through bullion dealers, online exchanges, and sometimes banks or financial institutions specializing in precious metals. ### What term best describes an investment to protect against decreased purchasing power? - [x] Inflation Hedge - [ ] Bullion Investment - [ ] High-risk Investment - [ ] Currency Trading > **Explanation:** An investment that is used to protect against decreased purchasing power, often due to inflation, is known as an inflation hedge.

Thank you for exploring the comprehensive details about the Krugerrand and challenging yourself with our quiz. Keep enhancing your understanding of financial investments!

Wednesday, August 7, 2024
Kudos
KPMG
Specie January 1, 1

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.