October 4, 2018
There are various ways you can invest in gold, and buying Krugerrands is just one of them. Let’s find out about Krugerrands and how you can purchase and invest them.
Because the Krugerrand has its own inherent financial risks regarding buying and selling, we would like to urge readers to regard this article as only information. If you would like to purchase Krugerrands, please consult a certified, financial advisor, who can provide you with professional advice.
The gold coin does not display a face value, because its value is directly connected to the going gold price on the world market.1,2 In other words, as the gold price rises and falls, so does the value of the Krugerrand.
The best time to buy a Krugerrand would be when the gold price is low, or when the Rand is strong against the US Dollar. Often the low levels of the gold price do not work in tandem with an acceptable exchange rate of the Rand. 1
You can purchase gold coins often if you are intending to invest them in the medium to long-term. We tend to get worked up about the peaks and the valleys over a relatively short period, but the overall, long-term picture may reveal steady growth. For instance, since 1967, when the coin was first launched, it doubled its value every five years. 1
Below are some guidelines to follow when buying a Krugerrand. 1
You can’t buy these coins from any person that comes along. Do a background check on the company you are dealing with. Have they been approved by the South African Association of Numismatic Dealers (SAAND) and the SA Mint? Both these organisations have established the standards required for high-quality coin production. Best let go of the vendor company you may be dealing with if it is not recognised by both key organisations. In this way, you’ll protect your business’s integrity and the standard of the bought coin. 1
Seeing the coin’s price is directly linked to the current gold price, stated in US Dollars, convert the latter into the equivalent ZAR, using the relevant exchange rate. Referred to by many as the “Spot” price of one ounce of gold, add to it the vendor’s commission, which usually ranges from 6 to 12%. You have now estimated the cost of a Krugerrand in ZAR. 1
Perhaps it is more meaningful to visit the local coin store to find out about buying Krugerrands. You can buy the Krugerrand in various fractions of an ounce, such as a tenth, a quarter, a half and a full ounce. long-term is done to cater for the affordability of different buyers. Nevertheless, most coin shops do not have many Krugerrands in stock, which means they will have to order them.1
Either via EFT or cash is the preferred method of payment. Many vendors do not like card-related transactions because of the extra commission charged by banks. The vendor may charge you a handling fee for a cash transaction, so rather pay via EFT. A mere phone call is acceptable to some vendors, followed by an EFT and proof of payment. 1
You can buy and store your gold coins using a bank’s online platform.2
You need to go to the coin shop, sign some documents and prove your identity before you can take possession of your Krugerrands. The vendor will give you a certificate of authentication, which you will need to keep in a safe place. The long-term declares specific details about the coin as well as its value. 1
You have to safeguard your coins because, if they get lost or are stolen, their value cannot be re-imbursed. Some vendors offer to keep your coins in a safe place, either for free or for some charge. However, be careful which vendor you select for storing your coins. Thieves have been known to break into safety deposit boxes. Be highly protective about any details or information concerning the coins.
If you can buy and invest with Krugerrands online, you can also buy online affordable car insurance with PMD. Go through the easy and quick process using PMD’s Online Insurance Purchase Platform, at a time and place you prefer. You don’t have to contact any one, but you can use the call-back facility if you need to. Extra audio and video materials are available to help you.