Gold Krugerrand History – The Story Behind the One oz Gold Krugerrand

The 1 oz Gold Krugerrand history begins not on July 3rd, 1967 when it was first struck- not even in planning and strategy meetings held by the Chamber of Mines of South Africa (established in 1889 as a voluntary private sector organization to represent the interests of mining employers) who were its architects.

The Krugerrand history begins in the hills of Witwatersrand, South Africa. The “ridge of white waters” is a series of east/west running ridges that are over 60 miles in length. In 1884 gold was discovered, and the mining camp at Johannesburg has since grown into a thriving metropolis. At the time, Paul Kruger was president of the Transvaal. In his memoirs he noted that General Joubert correctly predicted the gold discovery will “cause our land to be soaked in blood.” The gold discovery led to a huge influx of foreigners looking to make their fortune in gold. Eventually the high number of foreigners and concern for their rights led to conflict. The conflict was multifaceted, with some underlying motivation for the British empire to control this valuable commodity.

The spark that set off the powder keg of the second Boer war came in 1899, when the British demanded equal rights for all the foreign miners. Paul Kruger, concerned about keeping the Transvaal independent, fired back an ultimatum of his own. All British to be out within forty-eight hours. Needless to say neither side backed down, and a war raged for three years. The British eventually prevailed in 1902, and the Transvaal was absorbed- however Boers managed to salvage some conditions so it was not a total rout.

The next step on the golden road of Krugerrand history is the establishment of the Rand Refinery, which supplies the blanks for every Gold Krugerrand stamped. The Rand Refinery (est. 1920) was created by the Transvaal Chamber of Mines to refine all gold mined in South Africa; and immediately began to refine gold ore for one the worlds most prolific gold producing regions, Witwatersrand.

Now to assemble the essential elements of a One oz Gold Krugerrand. First on the reverse side of the coin, we have a Springbok antelope, designed by Coert Steynberg. The antelope symbolizes South Africa. Next the Krugerrand honors the 5th President of the South African Republic, Paul Kruger with a picture on the obverse. Finally, the name itself is derived by adding Kruger’s name to the national currency- the Rand. And where did the Rand come from? Witwatersrand of course.

In 1967 when Krugerrands were first produced, the United States government prohibited its citizens from owning gold bullion, but allowed ownership of foreign coins. The 1 oz Krugerrand was a brilliant piece of marketing for two reasons. One, it was the first bullion coin to be traded for its gold content, rather than a denomination on the coin (a 1 oz gold Krugerrand is 22 carats, 11 parts gold to 1 part copper- however it does contain one full ounce of gold bullion). As the price of gold fluctuates, so goes the price of Krugerrands. Second, by making the Krugerrand legal tender, it allowed American investors to purchase the coin. This allowed everyday people to buy gold without the need to have it melted and assayed. The South African Krugerrand was declared illegal to import in many Western countries during the 1970s and 1980s due to the policy of apartheid. With South African political reform from 1990 to 1994 and the abolishment of apartheid, one ounce Krugerrands became legal imports to the U.S. Even with the previous prohibitions, Krugerrands are the most popular gold bullion coin- with over forty-six million ounces in circulation. The One Ounce Krugerrand History is peppered with blood, politics, and ingenuity.