Keen On Cape Town

Investing in gold coins – Krugerrands, Mandela Coins, SA Collector Coins etc

Posted on January 23rd, 2010

Lately, there have been more and more ads promoting gold coins as an investment. The ads and the idea of gold coin investing caught my attention so I thought I’d do some further investigating into the subject.

I know when getting started with investing you should work with a reputable and well established company. And in the case of gold coin investing, the SAGCE is the one to go to in South Africa. The SAGCE is a popular choice for both collectors and investors, offering a variety of gold coins, Krugerrands and Mandela Coins. The company’s retail division Scoin Shops are convenient and make buying gold coins easy for private investors and collectors.

The Krugerrand is by far the most popular and most well known of South African gold coins. It is recognised as one of the top 300 brands in the world and it remains a standard in the industry. There are many valuable gold coins that investors and collectors look for. Limited edition gold coins such as those found in the Protea Series, Natura Series and Nelson Mandela gold medallion sets, are all highly regarded and are sought after by collectors and investors. There have also been limited edition releases to mark sporting events – for example, the 2007 Rugby World Cup gold coins and 2010 FIFA World Cup gold coins.

If you get more into the subject of gold coins, then you’ll hear terms like gold bullion and gold alloy. I’ll try to explain these terms briefly.

Gold bullion basically refers to any form of gold where the composition is almost entirely made up of gold. Gold alloy refers to a composition of gold and another base metal, where more than 50% of the total composition is gold.

Gold coins are not made up of 100% pure gold. In its purest form, gold is too soft to use for coins and jewellery on its own. It first has to be alloyed with other base metals like silver, nickel, copper, zinc etc. What you then get is a harder substance called ‘gold alloy’, which can be used for coins, jewellery and other items which need to be durable and solid.

Here’s an example. A Krugerrand consists of 91.67% pure gold. Krugerrands are strengthened and alloyed with 8.33% copper. This gives the Krugerrand an orange look. Compare one to a silver alloyed gold coin and you’ll see the difference. Copper alloy coins are harder and therefore more resistant to damage from scratches and dents.

Since we’re on the subject of Krugerrands, here are some more facts about this globally recognised coin.

  • The Krugerrand is rated as one of the Top 300 brands in the world.
  • Krugerrands are available in 1 oz, ½ oz, ¼ oz and 1/10 oz coins.
  • The coins are minted in 22 carat gold.
  • Krugerrand prices are quoted in US Dollars.
  • Looking at the Krugerrand coin, you’ll find Paul Kruger (president of the old ZAR – Zuid Afrika Republiek) on the one side and the famous prancing Springbok on the other side.
  • A Krugerrand consists of 91.67% pure gold. The remaining 8.33% is copper.
  • Proof Krugerrands are the most sought after Krugerrands. Only limited amounts of these coins have been minted which makes them more attractive to investors and collectors.
  • Traditional Bullion Krugerrands have 160 serrations, while Proof Krugerrands have 220 serrations.
  • Something which makes Krugerrands so popular, is the fact that they are available in 1 ounce coins – a preferred choice for private investors looking to buy.

Something else to consider is the ‘collectors value’ of gold coins. While the value is influenced by the gold price and the value of gold, the rarity of some gold coins brings into account the ‘collectors value’. Some collectors will pay more than the estimated market value if they’re looking for a specific coin. If you have a rare gold coin, it’s up to you and the collector to agree on a selling price – a price which could be very rewarding financially.

Be sure to buy your gold coins from a reputable dealer – like the South African Gold Coin Exchange (SAGCE) for example. Gold coins are an investment, so stick to authorised gold dealers and qualified gold brokers. Do your research, ask questions, check the coin gradings and check the coin values. An authorised gold dealer should be able to assist you with all your queries before you buy.

If you’re collecting gold coins or investing in them please feel free to post a comment.  How does it rate compared to other investments? It would be interesting to hear from you.

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11 responses to “Investing in gold coins – Krugerrands, Mandela Coins, SA Collector Coins etc”

  1. Removed says:

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  2. Removed says:

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  3. Thersia Krugel says:

    We are collectors of gold coins. We invested in 1/4 Mandela / De Klerk gold coins for my daughter with a policy we cancelled. It initially cost R7000.00 for the 2 coins. I’ve enquired what the value is now and it doubled to R14,000 for the 2 coins. If you want to invest in coins, you must buy collectors or rare coins. Never buy coins of which there are too much and also not if there is an unlimited amount made (the value is not very much). You must have two types of coin investments. One being Kruger Rands for quick selling if you need to sell and rare / collectors coins for negotiating the price. Remember if you have a rare / collectors coin with a number, nobody has that number and if a collector is looking for the number you have, you can sell it to him for the price you decide. Collectors coins are not connected to the gold price but Kruger Rands are, so if the gold price falls, the value of the Kruger Rand falls.

  4. Adrian says:

    Hi Thersia, thanks for the advice and information. That’s really interesting and definitely something to think about. Cheers, Adrian

  5. Richie says:

    Thersia, thanks for the information. I’m very interested in Mandela Coins and it’s always great to get someone else’s perspective and views on investing.

  6. Chantell says:

    When do I sell my rare coins? And what will I get for them? Who determines the buying price? Who will buy my coins? Feedback would be much appreciated 🙂

  7. Security Light  says:

    My grand father used to have those old Spanish gold coins in stock::.

  8. Xolani Sithole says:

    Approximately how long does it take for 1 to make 100% interest from investments and what percent will be deducted when 1 decides to sell the coin?

  9. Frans says:

    Hi, I would like to know where do I have to sell rare mandela coins

  10. Adrian says:

    Frans, the Scoin shops are very helpful, try getting in touch with one of them. Otherwise people sell on sites like BidOrBuy I’ve seen.

    Xolani, maybe try one of the Scoin shops to give you some guidelines there. All the best.

  11. Phill says:

    Enjoyed the read! Cheers mate! PS…found this on the first page of google searches…nice!

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