Tag Archives: buying gold coins
The Krugerrand
Among the more popular gold coins around is the Krugerrand which the South African government issues, the Krugerrand is one of the oldest gold coins issued in the world with a standard gold content or fineness of 0.916. The coin was first minted in 1967 by the South African mint with the sole purpose of marketing South African Gold to the world. The point behind the minting of the Krugerrand was to encourage the private ownership of gold and the plus point of the Krugerrand to those who own is the fact that this particular coin enjoyed the status of being ‘legal tender’. It was the introduction and the success of the Krugerrand that sparked the production of the Canadian Coin (Maple Leaf) towards the end of the 70s (1979) which was followed by the production of the Australian Nugget 2 years later in 1981. Only after a year later did the Chinese Panda arrive in the market a year later followed by the American eagle in 1986. The last in the series was the introduction of the Britannia coin which was introduced in 1987.
Physically the Krugerrand Gold Coin is exactly 32.77 millimetres in diameter with a thickness of 2.84 millimetres. The weight of this popular gold coin is 1.0909 troy ounces which is equivalent to 33.93 grams. The coin is minted from 22 Karat gold which is 91.67 % pure gold with 8.33 % consisting of copper (also commonly referred to as crown gold). The coin was basically named after the statesman Paul Kruger who served as the president of the South African Republic for 4 terms. The coin bears his face on one side and has a depiction of the springbok on the other side (the springbok is one of the many national symbols representing South Africa).
After 1980 the Krugerrand was reintroduced in different denominations besides the 1 oz with the ½ (16.965 grams), ¼ (1.888 grams) and 1/10 (1.35 grams) oz being introduced into the market. Proof Krugerrand can also be acquired in the market; however proof Krugerrand are more of a collector’s item rather than an investment bullion as the prices of proof coins usually have a higher value than gold bullion market price.
Whatever the form that the precious metal comes in, it is without any doubt that it is one of the few commodities in this world through which value in terms of purchase power may be preserved when purchased and stored safely as a long term investment. Investing in gold takes on many forms and the easiest way is to buy gold coins and the African Krugerrand is among the most popular among gold coins that people invest in as the coin is not only a recognised asset, it is also acknowledged for its growth in value with regards to numismatics as some of these coins are issued under ‘limited edition’ series which make them desirable to collectors who quickly drive the prices of these coins up in a bid to own them.
Grading Coins
There are numerous ways through which one is able to grade gold coins in order to determine their ‘numismatic’ value. One of the most popular grading methods was invented by Dr. William Sheldon in 1949 which is a 70 point grading system that is still used by gold and silver coin collectors everywhere. Grading gold coins or silver coins is an essential part of numismatics before trades are made. The more familiar gold coin collectors are with the scale the more leverage they have to bargain or rather negotiate the price of the gold or silver coin that they intend to buy or sell.
Reputable gold trading companies that deal with coins made of precious metals also employ this method in a reasonable and justified manner, and before you buy gold coins you should become familiar with this method. Starting with the ‘Business Strike Coin’ which is the coins that are minted for circulation in commerce rather than it is for collectors. Following closely behind Business Strike is the Proof – These are coins with numismatic value that are typically designed for collectors and not commerce these coins are distinguished by sharpness of detail & usually with a brilliant, mirror-like surface. The term Proof that is attached to it refers to the method of manufacturing and it is not a reference to a coin grade.
The terms Mint State (MS) and UN circulated (Unc.) refer to coins that are in immaculate condition. These coins are practically new and probably became a collector’s item from the moment it left the minting. The highest grade in the Sheldon Gold Coin Grading Scale is the Perfect Un circulated (MS-70) – Perfect new condition, showing no trace of wear. Coins belonging in this grade are extremely rare. The Second highest grade that follow suit is Gem Un circulated (MS-65) – An above-average un circulated coin that may be brilliant or lightly toned and that has very few contact marks on the surface or rim this grade is pursued by Choice Un circulated (MS-63) – A coin with some distracting contact marks or blemishes in prime focal areas. After this there is the Un circulated (MS-60) – A coin that has no trace of wear, but which may show a number of contact marks, and whose surface may be spotted or reduced in shine and smoothness. The lower grades in the popular precious metal coin grading system sees the Choice Very Fine under the VF-30 category these coins have light, even wear on the surface and highest parts of the design but all lettering and major features are still sharp and prominently distinct.
The Very Fine VF-20 category follows next with coins showing moderate wear on high points of the design. All major details are still clear however. Towards the Fine F-12 grade the coins are deemed to have been subjected to moderate to considerable even wears. The entire design is bold with an overall pleasing aged appearance. The Very Good VG-8 follows the F-12 where the coins are well-worn with main features clear and bold, although rather flat due to constant usage. Reaching the Good G -4 grade the coins are heavily worn, with the design visible but faint in areas with most details flattened.
The final class of the grading system is the most common condition of most ‘old’ numismatic coins is the About Good or AG-3 category, these numismatic coins are usually very heavily worn with portions of the lettering, date, and legend are botched and smoothened out with the dates being barely readable.