Buying Gold Krugerrands

June 22, 2011 - by mosesbet · Filed Under Gold Coins Leave a Comment

Investing in Gold Krugerrands

Many small investors are familiar with the advantages of investing in gold funds or ETFs. The popularity of gold bars also shows that these are considered sound investment options. But only a few investors realize that gold Krugerrands offer a wonderful investment opportunity as well. Krugerrands, or Kruger, is an alternative to bullion that many savvy investors across the world are choosing to invest in today.

The History of Krugerrands

Krugerrands were first minted in South Africa in 1967. There, these coins are considered legal tender which allows the import of the coins into several countries without taxes or duty. Originally Krugerrands were minted in one single size only and this coin contained a full troy ounce of gold. Later, the coin began to be made in three sizes- the tenth ounce, quarter ounce and half ounce. Even today, the word Krugerrand or Kruger refers to the original one ounce version of the coin. Until 1971, owing to restrictions on acquisition of bullion gold coins, British residents could not invest in these.

The Krugerrand Today

Today, the Krugerrand is one of the most popular ways in which to invest in bullion. These coins can be bought at prices that are slightly lower than any other form of one ounce gold coin. Clearly this is a great advantage for the investor, which is the main reason behind the Kruger’s popularity. The original Krugerrands that were minted in the years between 1967 and 1979 may sell at a slight premium, which is also reflected in their resale value.

Krugerrand vs. British Sovereigns

The British Sovereign has both intrinsic as well as historic value and it is a coveted purchase for those interested in numismatics. The coins also have aesthetic appeal and the differential designs on sovereigns from different periods makes these wonderful collector’s items. Other than this, the fact that the sovereign is no longer being produced makes a limited quantity of these coins available for purchase. This rarity and aesthetic appeal makes the value of the British Sovereign escalate with the passage of time.

The Krugerrand is not limited in supply nor was it ever designed for aesthetic appeal. So these factors do not help this coin appreciate in value. However, the same factors also make these far easier to buy and cheaper too. For small investors who are looking for risk free, sound investments, the Krugerrand is a better and more affordable option than the British Sovereign.

One factor in favour of the Krugerrand is its consistently high quality. This makes it easier to trade than the other forms of gold whose purity cannot be verified. It is also easy to compare other gold forms with the Krugerrand, in terms of price, because this coin contains exactly one ounce of fine gold. Where tradability is concerned, the Krugerrand is a good choice.

Investing in Krugerrand

You may find that buying more number of Krugerrands gives you a cost advantage over buying one at a time. This may not be true if you buy standard gold bars or gold sovereigns. These factors make the Krugerrand a good place to park your funds in when you receive a large sum from some source.

There are several sites that offer Krugerrands for sale through online transactions. This is the way in which most investors buy into gold today as it is an easy, quick and cost effective method. However, it is very important to buy only from a well established online exchange so that you can be sure of buying genuine coins of the finest gold.

Another factor to consider before your purchase is the price offered by the online exchange. Although there is not much scope for massive differences in price, some exchanges offer more competitive rates than others. When you are looking to make a large investment even this marginal difference in rates could translate into a substantial figure. While checking the rates offered, it is also important to note the charges and fees that will add to your total outlay. A comparison of all the charges plus the price of the Krugerrand offered by different online exchanges will help you identify the one you should make your purchase from.

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