The COVID-19 pandemic has shed light on the volatility of some forms of investments.
Many people have lost large sums of money due to the ensuing economic instability and seen their long-term investments, such as retirement annuities, decrease in value.
Gold is considered one of the most stable investments so it comes as no surprise that there’s been a rapid increase in the purchase of Krugerrands.
An increase in the price of gold has also made Krugerrand prices skyrocket.
Increasing value of Krugerrands in 2020
For the second time in two years, Krugerrands have reached record prices. The 1-ounce bullion Krugerrand increased from R19,000 in January 2019 to R26,800 in December of the same year.
The current price of the standard 1-ounce bullion Krugerrand is listed as R36,400 on The Scoin Shop, which is in line with the current gold price per ounce (mid-April 2020).
Global economic instability due to the novel coronavirus pandemic has resulted in many currencies losing value. This makes investors look to currency hedges, such as gold, as a more stable investment option.
Krugerrands as a rand hedge
Rand hedges are investments that can benefit from, or be unaffected by, a weaker rand. When investing with a weaker or more volatile currency like the rand, it’s considered good practice to have a portion of your portfolio invested this way.
Rand hedging can be achieved by investing in shares or assets that increase in value when the rand gets weaker. Gold is a great rand hedge because the gold price can escape the volatility in the rand’s value.
Many investors include gold in their investment portfolios to diversify their assets and protect themselves from market crashes.
Krugerrand sizes and types
Gold Krugerrands come in two types – proof and bullion – and in several different sizes and values.
Proof Krugerrands have a numismatic value. Bullion coins are valued at a universal gold bullion price.
Bullion coins are also more hard-wearing and won’t lose value if scratched.
Both bullion and proof Krugerrands come in 1/10, 1/4, 1/2 and 1 ounce sizes. In 2017, silver Krugerrands were introduced. They have the same face design as the gold Krugerrands but are only available in 1 ounce as standard.
The Krugerrand, named after Paul Kruger, was the world’s first bullion coin when it was produced in 1967.
After the gold standard was dropped in 1971 and the gold market opened up to private owners, South Africa started producing the Krugerrand to market its gold.
By 1980, Krugerrands accounted for 90% of the world’s gold coin trade. Krugerrands remain the most popular bullion coin in the world.
The 2020 Krugerrand
The design of the Krugerrand hasn’t been changed for the 2020 issue. Both the gold and silver coins are available in proof or bullion. There are also some collector’s editions of the 2020 issue available.
- the 2-ounce silver-proof Krugerrand is the first-ever issue of a 2-ounce silver Krugerrand
- the 1-ounce gilded silver Krugerrand, which features a 24-karat gold springbok on the reverse
- the 1-ounce colourised silver Krugerrand, which features a colourised lacquered springbok on the reverse.
At Lamna, we offer short-term asset-based loans.
Use any paid-off asset, such as gold or Krugerrands, as collateral on a cash loan.
Client borrows R10,000 for 90 days.
Total Cost of Loan
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.