Silver South African Krugerrand

Investors looking for options to invest in silver have a relatively new silver coin to explore. First launched in 2018, the Silver Krugerrand adds to South Africa’s exciting range of bullion coins. The Krugerrand silver coin expands on the enduring gold offering, making the Krugerrand even more accessible to investors and collectors worldwide. The coin uses the same iconic designs of President Paul Kruger on the obverse and the Springbok antelope on the reverse. The Krugerrand coin gets its name from a combination of Kruger’s name and the word for the official South African currency, the Rand.

Silver used to manufacture the silver Krugerrand bullion coin is sourced in compliance with the Responsible Silver Guidance of the London Bullion Market Association (LBMA) [1]. The Silver Krugerrand differs from its gold counterpart by including a face value. However, the coin’s value goes beyond this assigned monetary figure. The Silver Krugerrand coin, offered in a 1-troy-ounce denomination, features silver purity that exceeds 99.9%.

History

As a hotbed for gemstones and precious metals, South Africa first issued a commemorative gold bullion coin as a tool for marketing the country’s vast gem and metal reserves. The Gold Krugerrand has the distinction of being the first commemorative gold bullion coin on the market for private gold ownership. Introduced in 1967, the Gold Krugerrand was uncontested for a number of years. The Canadian Gold Maple Leaf offered the first challenge on the market.

Up until 1979, over 20 million gold Krugerrands were sold to buyers in the United States alone, and popularity soared around the world. However, Western governments enacted an embargo in response to South Africa’s apartheid policies. The Krugerrand later rebounded in popularity, and the gold version is available today in bullion and proof form.

After seeing the gold Krugerrand enjoy more than 50 years of success, the South African Reserve bank authorized Prestige Bullion to create a silver bullion Krugerrand. This move also gives physical investors the ability to obtain the Krugerrand in a more accessible silver form [1].

The authorization meant that the partners in Prestige Bullion (Rand Refinery and the South African Mint) could develop and then deliver a Krugerrand silver coin. As all other major gold bullion coins also have silver coins as companions today, this move allowed the Krugerrand to join its respected peer group in this way as well. The introduction of the Silver Krugerrand likewise offers a credible new investment product in the silver market [1].

The Silver Krugerrand was a first choice for investors starting in 2017, but issues with test striking pushed back the initial delivery date. The coin was not originally intended as an annual release. Instead, the coin was released as part of the Gold Krugerrand’s 50th anniversary celebration.

The Silver Krugerrand launched in 2018 [2]. When the first commemorative coins proved exceedingly popular, the South African Mint decided to add the 2018 Silver Krugerrand and beyond as a permanent fixture of annual issues. This marked the first time in the Krugerrand’s storied history that it was issued annually in a metal besides gold. Investors can now purchase a 2019 Silver Krugerrand and look forward to additional Krugerrand silver options each year in the future.

Krugerrands are produced via a partnership between Rand Refinery and the South African Mint [2] [3]. The South African Mint is the Republic of South Africa’s official sovereign mint. From its headquarters in Centurion in the Gauteng province, the South African Mint produces coinage for the South African Reserve Bank.

Value

The silver Krugerrand is produced in a 1-troy-ounce denomination [1]. The coin derives its value from five main factors:

    1. Face value: Unlike the Gold Krugerrand, Silver Krugerrands do have a face value. The face value assigned to the Silver Krugerrand is R1, or 1 Rand [1].

 

  1. Silver content value: As with other silver bullion coins, the Silver Krugerrand is considered a leading physical bullion investment product. Its inherent value therefore goes beyond the assigned face value. Price of a Silver Krugerrand is determined based on daily official LBMA Silver Price benchmarks [1].
  2. Silver purity: Silver Krugerrand coins are struck from silver that has a purity exceeding 99.9% [1].
  3. Mintage: The Silver Krugerrand is produced in unlimited mintage. Quantity struck depends on the market’s demands, and daily mintage depends on the daily price of silver [2].
  4. Rarity: Relative rarity of this coin may play a role in the value in the future of a Silver Krugerrand from a given year .

Design

Distinct engraving and gorgeous mint luster make the Silver Krugerrand a stunning coin. The Krugerrand’s design elements have not changed since the first coin was introduced in 1967. The South African silver coins bear the same iconic imagery as their gold counterparts [1].

As with all Krugerrand coins, the Krugerrand silver version depicts an image of President Paul Kruger on its obverse side. This image functions as a symbol that demonstrates South African pride. Kruger served as the third president of South Africa’s republic from 1883 to 1900 and was so beloved that, in addition to lending his image to the coin, his name makes up part of the coin’s name. Otto Schultz designed this bust of Kruger, which is surrounded by 200 serrations on the silver version of the coin [1].

The reverse of the Silver Krugerrand continues with symbolic imagery. This side features South African sculptor Coert Steynberg’s Springbok design [1]. The Springbok antelope is native to the region and is also South Africa’s national animal. In the iconic image on the Krugerrand coin, the Springbok elegantly bounds across a plain.

The Silver Krugerrand builds on the longstanding success of South Africa’s Gold Krugerrand and provides a coin even more investors can access. Though the Krugerrand silver version is a relatively new coin, it is likely to have an enduring impact for investors and collectors.


Article Sources:

1. LBMA Alchemist Issue 90. ‘The Silver Krugerrand Has Arrived,’ http://www.lbma.org.uk/assets/Alchemist/Alchemist_90/Alch90Collocott.pdf. Accessed September 19, 2020.

2. Rand Refinery. ‘Products,’ http://www.randrefinery.com/products/. Accessed September 19, 2020.

3. South African Mint. ‘Bullion,’ http://www.samint.co.za/collectable-coins/bullion/. Accessed September 19, 2020.