Issue 90
The Silver Krugerrand Has Arrived
The August 2018 launch of the silver bullion Krugerrand is an important milestone for the physical precious metals markets and is the first new bullion product being delivered under the Krugerrand brand since the launch of fractional gold Krugerrands in 1980.
The introduction of a new bullion product from this iconic global brand will likely attract interest from global investors and collectors alike.
About The Gold Bullion Krugerrand
The gold bullion Krugerrand is credited as being the first modern gold bullion coin. It was launched in 1967 as a vehicle for adding value to South Africa’s gold mine production and as a tool to allow for private ownership of gold. The gold Krugerrand was the brainchild of the South African Chamber of Mines and was innovative in that one of the unique characteristics of the gold Krugerrand is that it is denominated in ounces of pure gold, making it the only meaningful gold coin that has a gold face value, rather than a fiat currency one.
Gold bullion Krugerrands tapped into a significant pool of demand globally, resulting from the fact that its launch was shortly before the lifting of the ban on the private ownership of gold in the USA and other countries in the world. Peak demand for the gold bullion Krugerrand was reached in 1978, when over 6 million ounces of Krugerrands were sold. The gold bullion Krugerrand operated more or less without competition until 1979, when the Canadian Maple Leaf coin was launched.
Peak demand for the gold bullion krugerrand was reached in 1978, when over 6 million ounces of krugerrands were sold.
Growing Demand
Demand for the gold Krugerrand remained strong until 1984, when USA-led sanctions were introduced against South Africa, which had a negative impact on export sales of Krugerrands. The US Mint launched the gold Eagle coin in 1986, the Perth Mint launched the gold Nugget in 1987 and the Austrian mint launched the gold Philharmonic in 1989.
Demand for the gold bullion Krugerrand returned in 2007, at the beginning of the great financial crisis, when investors globally sought quality assets as the equity and debt markets struggled.
Allure Of The Krugerrand
In 2016, the gold Krugerrand regained its position as the world’s top-selling gold bullion coin, and it repeated this in 2017. Based on current data and market information, it looks likely that the gold Krugerrand will be the top- selling gold coin in 2018.
The Krugerrand’s success is attributed to its:
- Liquidity – With over 60 million Krugerrands sold since launch, the Krugerrand is the most widely held and traded gold coin in the world.
- Consistency – There have been no changes to the design since launch in 1967. This means that buyers can trade and realise value for coins no matter what year they were produced in.
- Durability – The 22-carat alloy used makes the coin harder and more durable than 24-carat coins, making secondary trade easier.
- Trust – Having a track record of over 50 years gives consumers confidence in the product and its origins.
The new silver bullion coin will bear the same iconic design as the gold bullion Krugerrand, featuring the springbok designed by Coert Steynberg on the obverse.
The New Silver Bullion Krugerrand
Building from over 50 years of success and in order to provide the Krugerrand to physical investors in a more accessible form, the South African Reserve Bank authorised Prestige Bullion to proceed with the creation of a silver bullion Krugerrand during 2018. This authorisation has allowed Rand Refinery and the South African Mint, the partners in Prestige Bullion, to develop and deliver the silver bullion Krugerrand, which gives physical silver investors the option of buying the Krugerrand as a silver coin.
The silver bullion Krugerrand launch has been contemplated for a few years; in fact, all of the other major gold bullion coins already have a silver companion. By offering a silver option, the Krugerrand joins its highly respected peer group and offers a credible new silver investment product.
Specification And Design
The specification, finish and many elements of the design will be instantly recognisable, as the Krugerrand’s design has not changed since its introduction in 1967.
The new silver bullion coin will bear the same iconic design as the gold bullion Krugerrand, featuring the springbok designed by Coert Steynberg on the obverse. The reverse of the coin features the bust of Paul Kruger, designed by Otto Shultz, surrounded by 200 serrations. Each coin has a face value of R1.
The silver Krugerrand will be produced in unlimited mintage depending on market appetite. Weighing 31.107g with a diameter of 38.725mm, the silver bullion Krugerrand will be made from silver with purity exceeding 99.9%. All silver used in the manufacture of the silver bullion Krugerrand is sourced in full compliance with LBMA’s Responsible Silver Guidance.
It is expected that the silver bullion Krugerrand will join its global peers as a leading physical bullion investment product, and its price shall be determined based on the daily official LBMA Silver Price benchmark. The coins will be available in tubes of 25 or in monster boxes containing 500 coins. Prestige Bullion does not sell directly to members of the public, but rather sells through a well-established network of international bullion dealers.
All silver used in the manufacture of the silver bullion krugerrand is sourced in full compliance with LBMA's responsible silver guidance.
Richard Collocott is Executive Commercial Head of Rand Refinery (Pty) Ltd and a director of Prestige Bullion (Pty) Ltd.
Richard is responsible for commercial matters for Rand Refinery and global marketing and sales for Prestige Bullion. Prior to joining Rand Refinery in 2014, Richard worked in a variety of leadership roles in the base metals, precious metals and diamond industries.
Rand Refinery is one of the world’s leading gold refineries and has been a good delivery refiner since 1923. Prestige Bullion is a joint venture between Rand Refinery and the South African Mint RF (Pty) Ltd, a 100% subsidiary of the South African Reserve Bank, and is responsible for the management of all South African issued legal tender bullion coins.