How to Buy a Gold Krugerrand
Gold Krugerrands were the very first gold bullion coins sold to private citizens. The first Krugerrands were introduced in South Africa in 1967, but they were not legal to own in the United States until 1975 when the US lifted a ban on private gold ownership. Today they are among the most recognized gold bullion coins. They are traded and collected around the world.
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Instructions
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Understand what a gold Krugerrand is. They are gold bullion coins made out of 91.67% fine gold. On the obverse is the image of Paul Kruger, former State President of the South African Republic. On the reverse is the image of a springbok, a kind of gazelle. They are minted in South Africa by the South African Mint Company and sold all over the world.
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Decide which size Krugerrands you want to buy. The original size of a Krugerrand is one ounce. It measures 32.77 mm in diameter and 2.83 mm thick. This is the most commonly traded size of Krugerrand. They also come in three smaller sizes. The 1/2 ounce Krugerrand measures 27 mm in diameter and 2.24 mm thick. The 1/4 ounce Krugerrand measures 22 mm in diameter and 1.52 mm thick. The 1/10 ounce Krugerrand measures 16.46 mm in diameter and 1.19 mm thick.
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Determine your budget. The price of Krugerrands depends on the spot price of gold on any given day. The higher the price of gold, the fewer Krugerrands you will be able to buy. Estimate that you will be paying about 5% more than the spot price of gold. This takes into account production costs and merchant profit. For example, if the price of gold is $900 per ounce and your budget is $1,000, you will be able to buy one ounce of Krugerrands.
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Shop around for a gold Krugerrand seller. Links to a few examples are provided in the References section. Only buy Krugerrands from reputable gold dealers who can guarantee authenticity. Counterfeit Krugerrands are somewhat rare but they do exist. Make sure that your dealer will stand behind their sale.
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Ask for a better deal. Gold bullion sellers like to sell in bulk. If you are buying a large quantity of gold Krugerrands, you can often negotiate a better price. At the very least they should throw in free shipping and insurance. Many states also waive the sales tax for gold transactions over $1,000. Ask the gold dealer about this. Some wont tell you about it.
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