South African Krugerrand Guide
The Krugerrand is a South African gold bullion coin first struck in 1967 and widely credited as the first modern gold bullion coin sold to the public. It is 22-karat (.9167 fine) and contains one troy ounce of gold. Because it falls below the IRS purity standard and is not named in the statute, it is generally not eligible for IRAs and is usually bought for direct ownership.
Origins of the Krugerrand
South Africa introduced the Krugerrand in 1967 to help market its gold output to private buyers worldwide. At the time, most gold coins available to the public were older circulating issues bought by collectors. The Krugerrand was different: a coin whose value was meant to track the gold it contained, sold at a modest premium over the metal.
The name joins "Kruger," after Paul Kruger, a 19th-century president of the South African Republic, and "rand," South Africa's currency. The South African Mint strikes the coins, and the gold comes from South African refining. Unlike most bullion coins, the Krugerrand carries no stated face value, though it is legal tender in South Africa.
Design
The obverse shows a bust of Paul Kruger. The reverse features a springbok antelope, a national symbol of South Africa, designed by Coert Steynberg. The design has stayed essentially unchanged since 1967, which helps make the coin easy to recognize. Each coin is marked with its fine gold content.
Specifications and Sizes
The Krugerrand is an alloy of gold and copper. The copper gives the coin a distinctly orange-gold color and makes it harder and more scratch-resistant than pure gold coins. The one-ounce coin weighs about 33.93 grams in total but contains exactly one troy ounce (31.1035 grams) of pure gold.
- Purity: .9167 (22-karat)
- Gold content, standard coin: 1 troy ounce
- Fractional sizes: 1/2, 1/4 and 1/10 ounce, introduced in 1980
Our guide to gold purity and karats explains why a 22-karat coin can still hold a full ounce of gold.
The Sanctions Era
The Krugerrand dominated the global gold coin market through the 1970s, which prompted other countries to launch competing coins, including Canada's Gold Maple Leaf in 1979. In the 1980s, several Western countries restricted imports of the coin as part of economic sanctions against South Africa's apartheid government; the United States banned new imports in 1985. Those restrictions were lifted in the early 1990s. The episode is one reason the American Gold Eagle was created around the same time.
Why This Gold Coin Is Generally Not IRA Eligible
Section 408(m) of the Internal Revenue Code treats most coins and metals as collectibles that cannot be held in an IRA. It allows two kinds of exceptions: specific U.S. coins named in the law, such as American Eagles, and bullion that meets the fineness standard of a regulated futures market, which for gold is .995.
The Krugerrand fits neither exception. Its .9167 purity is below .995, and it is not a U.S. coin named in the statute. That is the key contrast with the American Gold Eagle, which shares the same 22-karat purity but is allowed because the law names it. IRA custodians generally will not accept Krugerrands. If you want gold in a retirement account, our list of IRA-eligible gold coins shows the usual options, and our page on the collectibles rule explains the legal background.
Buying Krugerrands for Direct Ownership
Outside retirement accounts, the Krugerrand remains a common choice. Some of its practical traits:
- Recognition: decades of production make it familiar to dealers in many countries.
- Durability: the copper alloy resists scratches better than pure gold coins.
- Premiums: the Krugerrand has often traded at relatively modest premiums over spot compared with some newer coins, though pricing varies by dealer and market conditions.
- Secondary market: older coins with different dates generally trade as bullion rather than as collectibles.
Before buying, compare the per-coin price with the spot value of one ounce from more than one dealer; our guide to premiums and spreads explains how. Storage choices for coins held outside an IRA are covered in precious metals storage options.
Where Goldco Fits
Goldco is a precious metals company that offers direct purchases of physical gold and silver as well as metals for IRAs. The Krugerrand is not among the coins highlighted in the verified list we use for this site, so check Goldco's current catalog or ask a precious metals specialist which coins are available. Its website lists a minimum for direct purchases, according to Goldco's website at the time of writing; confirm current terms. Our guide to buying directly from Goldco and our Goldco review explain how that process works.
Taxes on Selling
For U.S. taxpayers, the IRS treats gold coins as collectibles. Long-term gains on collectibles can be taxed at a maximum rate of 28%, which is higher than the top rate for most long-term stock gains. Our guide to taxes on selling physical gold covers the basics, and a licensed tax professional can explain how the rules apply to you.
Frequently Asked Questions
How much gold is in a Krugerrand?
The standard coin contains one troy ounce of pure gold. Its total weight is higher because of the copper alloy.
Why is the Gold Eagle allowed in an IRA but not the Krugerrand?
Both are 22-karat, but the tax code specifically names American Eagle coins. The Krugerrand has no such exception.
Does the Krugerrand have a face value?
No stated face value appears on the coin, though it is legal tender in South Africa.
Are old Krugerrands worth more than new ones?
Usually not. Most dates trade at bullion value, though a few special or proof issues may draw collector interest.