Q about Krugerrands

doh

Now back when I was a young pup I remember hearing my local dealer tell people to only buy AGEs, Maple Leaves or Pandas. Krugerrands were for some reason undesireable and worth less than spot when it came time to sell (and conversely were discounted when purchased compared with AGEs, etc). Was this ever the norm? Or was my local guy out of the ordinary? This was also when gold was like $300/oz if that makes any difference...

metalmeister

You can buy them slightly lower but the they sell slightly lower.
Its a bunch of crock if you asked me. Krugerrands where the
first and from Africa to boot.

Weiss

They were discounted in the past, and they may still be in some areas.

But I think that's going away now. They've been making them for decades, and the Rand refinery continues to make them to this day.

For example, Tulving's buy price is spot + $10.
I wouldn't have expected that. Or these other buy prices:

Australian Kangaroo 1 Ounce 24KT Nice BU Gold Spot +$10
Austrian Philharmonic 1 ounce .9999 24kt Gold Spot +$10
Chinese Panda 1 ounce .999 24KT Gold Spot +$10
So. African Krugerrand 1 ounce-Including 2009 Gold Spot +$10

That could just be a function of the recent run-up. But it speaks to the desirability of krands.

doh

Thanks for the info guys...very enlightening.

gsa1fan

I heard jewelers did not like them because of the alloy's in them.

Weiss

<< <i>I heard jewelers did not like them because of the alloy's in them. >>



Gold eagles are alloyed as well. They're both 22k.

roadrunner

Krugs were illegal to import in many western nations in the 1970's, 1980's and even up to 1994 due to anti-apartheid sentiment. It could be that memories from that time still linger today.

roadrunner

mhammerman

As it was told to me by an olllllddd coin dealer...He said that in the US the dealers were more familiar with US issued gold coins and therefore it is easier for them to be confident in them because they know what they should look like and how they should fee. Additionally, if you were in the US, you would rather sell coins that are more familiar to local folk than not. He cautioned me to only buy US issued gold coinage, old or new. Can't say if his logic is good or his reasoning was tainted by citizenship but that's what he said and I really haven't bought or tried to sell a foreign gold coin in the US so I don't have a lot of dealings with foreign gold. When you look at the premiums, it does seem that age's and buffs do command a good premium over foreign even if the commems are somewhat languishing other than their metal content. JMHO

MoneyLA

Krugerrands are still considered to be "politically incorrect" in some parts. But I think its a distant holdover from the anti-aprtheid days.

They still carry a lower premium, both buy and sell. But with current political situation and human rights in SA, the K should be on par with the AGE and ML.

Weiss

At the risk of rationalizing my most recent purchase: the Rand refinery's website says that more k-rands have sold worldwide than all other gold bullion coins--combined.

And something I knew but didn't fully appreciate until yesterday. People outside of our somewhat insular hobby genuinely don't know from eagles, buffaloes, philharmonics or maples.

But they do know Krugerrands. It's part of the collective unconscious all over the world. Krugerrand = Gold. When you see it in action like I did yesterday, it really makes you see Krugerrands in a new light.

SHTF'ers and TEOTWAWKI'ers should take notice.

mhammerman

"SHTF'ers and TEOTWAWKI'ers should take notice."

Interesting postulation and something to be considered.

Ciccio

<< <i>At the risk of rationalizing my most recent purchase: the Rand refinery's website says that more k-rands have sold worldwide than all other gold bullion coins--combined.

And something I knew but didn't fully appreciate until yesterday. People outside of our somewhat insular hobby genuinely don't know from eagles, buffaloes, philharmonics or maples.

But they do know Krugerrands. It's part of the collective unconscious all over the world. Krugerrand = Gold. When you see it in action like I did yesterday, it really makes you see Krugerrands in a new light.

SHTF'ers and TEOTWAWKI'ers should take notice. >>



I agree with you Weiss.
I am italian and I wasn't a collector until this year (my dad was though) but I knew that Krugerrand=Gold.
They are the most common worldwide.

Of course, if you live in the US, the best buy is the AGE. You now see them in a full page in "Metro" and "AM" too!

CaptHenway

<< <i>Krugs were illegal to import in many western nations in the 1970's, 1980's and even up to 1994 due to anti-apartheid sentiment. It could be that memories from that time still linger today.

roadrunner >>



The U.S. made it illegal to import krugerrands in 1985. The same law authorized the American Eagle program to replace them, starting in 1986. Because many jewelers and coin dealers had large inventories of jewelry mountings for KR's (which had been a huge seller for years), the Eagles were made to the same size, weight and karat fineness as the KR's. The only physical difference is that 3% of the Eagle, by weight, is silver, which gives it a lighter color than the KR.

It was never illegal to sell the KR's that were already here, and the ban against importation was lifted many years ago. However, many people still have an idea in their heads that there is something "wrong" with the KR.

If all of our bullion pieces were priced exactly the same, most people would take the eagles (except for certain cultures which traditionally prefer pure gold). The other stuff would just sit there, and so we, and most every other dealer, has a sliding scale of premiums that we sell them for. At the other end, we pay less for the pieces we have to sell for less.

It's called the Law Of Supply And Demand. Violate it at your peril.

TD

tetradrachm

In Cormac McCarthy's The Road Krugerrands make an appearance. They are the classic gold coin for survivalists. The problem is TSHTF so hard that gold is useless. Water, food, fuel and firearms are much more useful in that world.

I'm not too worried about encountering this scenario because there are much more likely bad things that can happen that would be of similar severity to me and my family, although not to civilization itself. And civilization faces more likely disasters in which gold would still be valuable, such as worldwide currency debasement or major wars and upheavals.

gecko109

"the Rand refinery's website says that more k-rands have sold worldwide than all other gold bullion coins--combined. "

IIRC, just the 1978 mintage of K-rands alone used more gold than every single panda made from 1982-2005. What does this mean for "pure bullion collectors"? Its probably a good thing due to the K-rand being universally known as "gold bullion". However, the flipside is that it makes the K-rand very ordinary and uninteresting to collect. Much like 90% junk silver, if I was trying to just build my PM stack with no regard to form, but only value, the K-rand is a great choice. However, I like to "have fun" with my aquisitions of PMs and so I prefer the much lower mintages, and the ever changing designs of the panda series even though it means that it will cost me on average perhaps 5-10% more than the equally adequate K-rands. So in conclusion, I think that one needs to analyze the reasons why they buy gold....coins in particular. For me, its probably an 85/15 deal whereas im 85% driven by SHTF scenarios, and 15% driven by numismatic persuasion.

7over8

Roadrunner is correct about the discounting of KRANDS in the 1980's and early 1990's due to the import ban on those coins in the US for political purposes.....

The restrictions have been lifted long ago, no discounting now....anyone who tries to buy at a significant discount is trying to get over on you.

MoneyLA

Krugerrands are sold by B&Ms at a discount of a few dollars each here in LA. It makes sense they would also be bought by B&Ms at a discount as well.