Gold IRA

What Is a Gold Krugerrand?

You’ve probably heard of a gold Krugerrand. But what is it? The Krugerrand is a 22-karat gold coin composed of 91.67% gold and 8.33% copper, produced by the South African Mint and Rand Refinery. 

Krugerrand gold coins are popular among numismatists interested in collecting coins for their historical and aesthetic value. They are also a favorite among gold stackers primarily interested in the value of the coin’s physical gold content. 

Popularity has fluctuated since South Africa minted the coin in 1967, seeing a downturn during the 1980s and 90s until apartheid ended in 1994. The gold Krugerrand and its silver and platinum variations remain as popular as ever. Coin collectors and people who prefer to safeguard their wealth through buying gold and other precious metals still share enthusiasm for Krugerrands of all kinds. 

However, it is important to note that the gold Krugerrand is not a gold IRA-eligible bullion coin. We’ll discuss why a little later. But, for diligent coin collectors and precious metals stackers, it’s important to understand the history of this special South African gold coin.

A Brief History of the South African Gold Krugerrand Coin

1967 South Africa gold Krugerrand coin
1967 South Africa gold Krugerrand coin, PCGS MS67

On July 3, 1967, the South African Mint collaborated with Rand Refinery to mint the first 1-ounce gold Krugerrand coins. The name “Krugerrand” combines the last name of Paul Kruger, former president of the South African Republic, and rand, a unit of South African currency. 

The original Krugerrand was minted according to the following specifications:

  • Weight/mass: 1 Troy ounce
  • Metal composition: 91.67% gold (Au), 8.33% copper (Cu)
  • Size: 32.77 mm diameter, 2.84 mm thick
  • Obverse (front/heads): Features a side-profile portrait of Paul Kruger, based on the Otto Schultz portrait of Kruger, with the words “SUID-AFRIKA – SOUTH AFRICA” in Afrikaans and English, respectively.
  • Reverse (back/tails): Features a pronking springbok antelope in the center, mint date on either side, “KRUGERRAND” at the top and “FYNGOUD 1 OZ FINE GOLD” at the bottom.
  • Additional details: Each side of the bullion coin features 160 serrations around the circumference of the coin face. Later proof coin versions have 220 serrations.

Why Did the South African Mint Make the Gold Krugerrand?

Minting the Krugerrand achieved a few major goals by:

  • Enabling private individuals to own gold. For most people, buying a bar of gold bullion wasn’t practical. Striking 1-ounce gold coins shaped South African gold into a size both portable and affordable.
  • Expanding the market and demand for South African gold. In 1974, President Gerald Ford repealed President Franklin D. Roosevelt’s 1933 Executive Order 6102, once again allowing American citizens to buy gold bullion in the form of coins and bars. People in the US were ready to buy gold, and Krugerrands were convenient to trade and carry, and they were attractive to collectors, too.

This strategy worked brilliantly. The South African gold Krugerrand had captured 90% of the gold bullion coin market worldwide by 1980. 

However, the world grew more aware of South Africa’s apartheid government policy of segregation, and by the mid-1980s many western countries had imposed economic sanctions on the birthplace of the Krugerrand. 

In 1985, the United States, which had been the largest market for the gold Krugerrand at its peak popularity, outlawed the purchase and importation of the popular gold coin. As the South African government began to dismantle its apartheid laws and practices, sanctions eased. In 1994, the US ended the ban on importing Krugerrand coins. Although the market for Krugerrand coins took a substantial hit from the economic sanctions, the coin remains popular today in its many forms. In 2017, the South African Mint marked the 50-year anniversary of its most famous gold coin.

Why Is This Gold Coin So Popular?

Despite political setbacks, the South African Krugerrand remains popular with coin collectors and bullion seekers alike. Many coins are valued as either numismatic coins or bullion coins

Numismatic coins derive their value from their history, scarcity, condition as a graded coin according to the Sheldon coin grading scale, and demand on the coin market. Examples of numismatic coins include Mercury dimes, circulation coins with minting errors, and uncirculated proof coins that remain in pristine “mint” condition

A bullion coin, on the other hand, derives its value primarily from its precious metal content. This means that the bullion coin’s value changes based on the current market value of the precious metal from which it is minted, such as gold, silver, platinum, or palladium.

South African Krugerrands can be valued both ways — as a numismatic coin or as a bullion coin. The design of the coin enables this dual valuation. Each Krugerrand includes the mint year, but does not have a face value, somewhat unusual for coins minted and considered government-backed legal tender. The absence of a face value led to gold prices determining the value of the coin. Beginning in 1989, the South African government officially declared the gold Krugerrand legal tender. That’s no problem in a stable gold market, but you can imagine the difficulty if the purchasing power of your currency fluctuates several rands or dollars from one day to the next. However, the appeal to coin collectors and bullion buyers remains strong. It’s no surprise that this coin has earned such widespread popularity by appealing to related yet different coin markets.

Different Kinds of Krugerrands: Size and Precious Metals Variations

From 1967 until 1980, the South African Mint offered only 1-ounce gold Krugerrands. The Mint introduced smaller sizes in 1980 — 1/2, 1/4, and 1/10 ounce gold coins — increasing accessibility to yet wider markets. 

Krugerrand coins minted from silver and platinum arrived in 2017, the fiftieth anniversary of the original gold version. The SA Mint struck the silver Krugerrand from .999 fine silver and the platinum Krugerrand using .999 fine platinum. While Krugerrand coins are popular, it’s important to understand that they are not eligible for gold IRAs and other precious metals IRAs, according to IRS rules. Whether you’re thinking of buying Krugerrands as numismatic coins or as gold, silver, or platinum bullion, make sure you know why you’re buying and what that may mean for you before laying down your hard-earned money.

Bullion Coins Inspired by the Krugerrand

As happens when most products gain popularity, they inspire other similar versions, imitations, and alternatives. 

In this case, the 1967 gold Krugerrand inspired some of the most popular precious metals mints to create special gold bullion coins: 

How Much Is a Gold Krugerrand Worth?

Maybe you bought or inherited a gold Krugerrand coin and you’re wondering how much it’s worth. It’s important to understand that the value of a Krugerrand can vary greatly depending on weight, gold spot price, and whether you want to determine its numismatic value or the value of its gold content.

As I will always do, I encourage you to conduct thorough research before making any decisions to buy gold or any other precious metals, in any form. Different people choose different options for different reasons. To get you started, make sure you’re aware of how to research spot prices. Also, check out these basic tips for buying gold

Find out more about gold Krugerrands and other gold coins available from Rosland Capital.

Gold IRAs: What They Are, How They Work, and What Kind of Gold Goes Into Them

Although Rosland Capital does not provide investment or tax advice or the gold IRA itself, it does sell a range of IRA-eligible precious metals products. This includes gold, silver, platinum, and palladium in the form of coins and bars.

You’re probably familiar with traditional individual retirement accounts (IRAs), such as the SIMPLE IRA, SEP IRA, or Roth IRA, but did you know that you can add certain eligible gold products to a gold IRA? You can also add other precious metals to an IRA: silver, platinum, and palladium. 

Ever since the Great Recession that began in 2008, gold and other precious metals have enjoyed popularity and interest for holding value against market volatility and inflation. The quick recession and relative market volatility during the pandemic took the value of gold and other precious metals to record-breaking highs. 

It’s important to learn about gold IRAs and how they work because this can give you another tool for building and protecting the wealth you’ve built for retirement. Also, while many of the underlying rules for traditional IRAs and Roth IRAs also apply to precious metal IRAs, there are some crucial differences. Let’s take a look at what a gold IRA is, how it compares to traditional and Roth IRAs, and what kinds of gold and other precious metals you can contribute to an IRA.

What is a Gold IRA? How is it different from a traditional IRA?

A pile of gold bars.

Gold IRAs are individual retirement accounts into which the IRS allows the account owner to place and hold physical gold. Other precious metals IRAs include a platinum IRA, palladium IRA, and silver IRA. Only these four precious metals — gold, silver, palladium, and platinum — are eligible for inclusion in these unique, self-directed IRAs. 

With precious metals IRAs, the account owner typically exercises greater control in choosing which eligible assets to include in his or her accounts. This is compared to traditional IRAs and Roth IRAs, which are typically established through an employer and managed by a qualified financial professional who uses account owners’ contributions to buy pre-selected collections of stocks, bonds, and mutual funds chosen by their brokerage firm.  

Most people are more familiar with traditional IRAs and Roth IRAs. Traditional individual retirement accounts take different forms to appeal to different employment situations and financial goals. Some of the most common types of IRAs include:

  1. SIMPLE IRAs — a Savings Incentive Match Plan for Employees (SIMPLE) IRA is a form of traditional IRA retirement account that employers with under 100 employees can establish for employees. Employers must either offer a 3% matching contribution of the employee’s pay or a 2% nonelective contribution regardless of whether the employee contributed to the IRA or not.
  2. SEP IRAs — a Simplified Employee Pension Plan (SEP) IRA can be established by an employer of any size for an employee, but a SEP IRA is often used by self-employed individuals and freelancers because only the employer contributes to the account.
  3. Roth IRAs — these follow most of the same rules for other traditional IRAs, except for a few differences regarding contributions, tax rules, and distribution of funds. 

These kinds of IRAs only allow owners to contribute paper assets. In this case, paper assets include cash, stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other representations of wealth, as opposed to hard assets or physical assets such as physical precious metals or real estate.

A few similarities between traditional IRAs and precious metals IRAs include:

  • Tax benefits and incentives to encourage saving for retirement
  • Annual contribution limits 
  • Penalties of up to 25% for early withdrawal

A big difference between traditional IRAs and Roth IRAs compared to precious metals IRAs is that you can contribute physical gold, silver, platinum, and palladium to precious metals IRAs. This means you can purchase and hold approved gold bullion products in your gold IRA, for example. You can also roll over existing traditional IRAs into precious metals IRAs. This process involves converting paper assets into physical assets. Eligible precious metals include bullion in the form of coins and bars.

What Kind of Gold Can I Put In My Gold IRA?

The IRS describes the kinds of gold and other precious metals eligible to contribute to your gold, silver, platinum, or palladium IRA. IRA-eligible forms include “any gold, silver, platinum, or palladium of a fineness equal to or exceeding the minimum fineness that a contract market requires for metals which may be delivered in satisfaction of a regulated futures contract.” 

The following gold, silver, and palladium bullion coins are among the IRA-eligible precious metals products:

How Does a Precious Metal IRA Work and How Do I Start One?

The biggest difference about how gold IRAs work compared to traditional IRAs and Roth IRAs is that you need to have the physical precious metal. Most IRAs use a digital account indicating that you own a certain amount of stock. It’s important to be aware of the rules for storage of the precious metals you contribute. 

These metals must be stored and maintained by a trustee or custodian approved by the IRS in an approved depository. You can’t simply keep your gold and silver coins and platinum bars in a safe at home or in a safety deposit box and call it an IRA. This may lead to early withdrawal penalties.  

No one likes the idea of paying fees to store and maintain the physical precious metals for an IRA. But there can be value in diversifying a portfolio funding their retirement account. When market volatility and worries about inflation, interest rates, and the national debt threaten, it’s hard to put a price on the peace of mind that comes from taking steps to help guard your wealth and your future financial security.

I cannot overemphasize the need to do thorough research into the different kinds of IRAs available. Research and determine which option or options may be right for you. For example, begin with some basics such as researching spot prices and tips for buying gold and other precious metals. Then I encourage you to investigate the finer points about how gold IRAs and other precious metals IRAs work. Understand what fees may be involved.  Get more information about gold IRAs and IRA-eligible precious metals products from Rosland Capital.

Photograph of a pile of gold bars.

Five Tips for Buying Gold

Whether you’re a first-time buyer or an experienced precious metals shopper, buying gold takes a great deal of careful consideration. If you don’t go into making your purchase with the right preparation, you could run the risk of ending up with products that aren’t the right fit for you, or worse, being taken advantage of by less legitimate vendors.

To help put your mind at ease, here are five tips for success when buying gold from a precious metals firm:

1. Have A Clear Goal in Mind: Why Are You Buying Gold?

While gold undeniably holds value no matter its purpose, it’s a serious purchase that shouldn’t be made without some serious thought. The decision to include gold and other precious metals in your asset portfolio is one with long-term impacts, and it can be wise to determine the root of your interest in buying gold well before entering a transaction.

Before making your purchase, ask yourself: why are you buying gold in the first place? Is it to own a thing of beauty that you can show off to the world? Or are you purchasing precious metals to help protect your financial assets? The more confident you feel in your reasoning regarding gold, the easier it will be to commit to the idea and follow through on it.

2. Know What Type of Gold Would Best Suit Your Needs

Once you decide to purchase gold, it can be helpful to familiarize yourself with what your options are as far as the types of gold you have to choose from.

With Rosland Capital, for example, you can purchase gold bullion coins, gold numismatic coins (what’s the difference?), and gold bullion bars. With other vendors, consumers could also consider purchasing gold mining stocks, gold ETFs, or gold jewelry. All of these options hold potential value for those interested in buying gold, but it can be helpful to assess which gold products or assets would be the most beneficial in helping you achieve your personal goals.

3. Learn What You Can About The Gold Market

For those unfamiliar with how it works, the gold market and its price fluctuations can seem very confusing. In order to enter into your transaction feeling well-informed, it can be useful to conduct research into the factors that typically trigger gold’s movements on the market and, consequently, when the best time to buy gold would potentially be based on those movements. Seeking out resources like a gold price historical chart can also be helpful in order to gain a more comprehensive understanding of gold’s relative maintenance of market value over the years.

4. Research Reputable Precious Metals Firms

With a purchase as significant as physical gold, it’s natural to want to avoid getting scammed. To find a legitimate business to work with, make sure to perform thorough research in order to properly evaluate whether entering a transaction with a particular firm will successfully deliver the gold products you seek and provide you with an excellent customer service experience. Do they sell products from popular precious metals brands that come with a proper certificate of authenticity, grading, or approval from an authoritative assayer? Beyond the product itself, how does the company treat its customers?

Reputable businesses in the precious metals industry will typically be able to demonstrate their legitimacy through accreditations from trusted organizations, like an A+ rating from the Better Business Bureau or a AAA rating from the Business Consumer Alliance. These firms will also typically be able to showcase positive reviews from their satisfied customers in order to further reassure potential new buyers that they aren’t about to be scammed or ripped off.

5. Discuss Your Concerns with a Precious Metals Expert

If you’ve done all of the above steps and still have concerns about purchasing gold, seek out a precious metals expert with the knowledge and experience to address your questions and help you feel more confident in your decision. Firms like Rosland Capital have experienced specialists who can assist potential buyers in safeguarding their wealth and determining their next steps toward acquiring gold.For more information and advice on buying gold, visit Rosland Capital’s “How To Buy Gold” page on our main website as well as our supplementary educational site, Buy Gold 101.

New Video: Control the Money in Your Retirement

Here’s a look at another one of the new Rosland Capital commercials that were just completed. William Devane talks about controlling what you can control by backing your IRA with gold and silver.