Jump to content
gold creek

WAKY WEDNESDAY

Recommended Posts

gold creek    0
gold creek

Bad nite last nite on wacky Wednesday, proof Kruger Rands selling at bullion price and bullion not worth selling as can get more at the local gold exchange!!!!!!!!Rather concerning.......South-African-Gold-Krugerrand-1-oz-fine-gold.jpg.f43df62f67226175a6c7b4fda7048659.jpg

Share this post


Link to post
Share on other sites
jwither    10
jwither

I don't believe there are hardly any collectors of KR, proof or circulation strike.  The buyers are overwhelmingly "stackers" and "gold bugs".

From a collecting perspective, KR is just too expensive to complete anything for most collectors in your country.  Unlike the US which has an outsized proportion of "big budget" buyers and where many coins cost a lot more than American Gold Eagles, the KR is more expensive than the overwhelming percentage of Union and ZAR which makes it uncompetitive as a collectible.

In the past, I have considered trying to buy the fractional 1980 KR proofs which have a recorded mintage of 60.  I have never seen one but considering the prices I have seen for other low mintage SA coins, I suspect that these coins can only be bought at "stupid money" prices which will leave the buyer hopelessly "buried".

Like other low mintage RSA, I suspect that these fractional 1980 KR proofs aren't owned by many real collectors but disproportionately by "investors" who apparently believe that every low mintage South African coin should be worth "moon money".

Share this post


Link to post
Share on other sites
Pierre_Henri    14
Pierre_Henri

Regarding the Krugerrand - In proof the 1968 frosted (1044 issued) is sought after.

From 1988 onward the proof mintage was relatively low with say 1000 - 5000 issued per year but that does not really warrant a premium of more than 5% over gold price I would guess

In business strikes (non proof issues), the year 1992 is truly sought after with only 1803 struck.

From first hand experience I know that collectors would pay well over the spot price for this 1992 coin - why?

Many people who have bought Krugerrands over the years from the SA Mint  do not know that the coin is "scarce" so they are still locked up in old family holdings and seldom released for sale on the open market. 

For some reason, the Krugerrand is a very collectible coin in Germany - maybe of the surname?

For me, as a non-circulating issue, it holds very little collectors value as such, but each to his own - people collect what they like and that is fine with me.

Share this post


Link to post
Share on other sites
gold creek    0
gold creek

hi Pierre

Thanks for your info and post.As they say, each to their own.I did the half and full pond sets, got bored, sold them and went into 24 carot Mandela.Collected all (not that many really) got bored waiting for a yearly release and sold them.I then did Krugerrand bullion,and then in 2016 gold shot up and i got out at R22000.Lovely investment. February 2015 Gold price R13800, thats R8000 an ounce profit over a year.Sure it had a lot to do with Brexit and Zumas decisions, but there are 2 more years leading to the next election and i feel gold has the potential to exceed its last high come late 2019.I subsequently collect only PROOF Kruger rands, preferably SAGCE slabs with point values.Hard to find those with high point values so keeps my gold fever interest at a constant flow.Please let me know all info you have on the SAGCE slabs. I believe they are graded by Eli Levine and are awarded points from 100 either way up to 114 points.They sell at a premium and die hards believe in there value.Take care

Share this post


Link to post
Share on other sites
jwither    10
jwither

I don;t see that there are ever going to be any noticeable number of REAL collectors for the KR, whether proof or "business strike".  But then, stating this is undoubtedly an unpopular opinion, just as my prior comments contradicting the unrealistic expectations for Union and ZAR.

In my last post, I only stated one obstacle but there are at least two more.

The second one is that it isn't a real coin, just as other bullion NCLT isn't either.  It isn't remotely competitive to real collectors versus the alternatives which can be bought for the same money.

The second reason is that completing the full set is exorbitantly expensive because of the gold spot price, even without paying any numismatic premium.  It's no different than the US "First Spouse" series except that it costs even more.  The First Spouse series contains the portraits each president's wife, except I believe for those currently alive.  The metal content of this series is probably in the vicinity of $30,000 USD.  The mintages are quite low by US standards but this is misleading because the correct comparison is the number surviving (certainly near 100%) in "high quality".  By this measure. it is common.  The series also has ZERO numismatic appeal EXCEPT to "investors".  I'd say the real collector base probably numbers in the hundreds, if that.

In the US, there are a lot of "investor" buyers and others who aren't collectors at all who just buy whatever its supposed "scarcity".

What I describe for this series, it's pretty much an accurate description of the KR's perception, only worse.  It's worse because it's relative value versus the coins most SA collectors actually want to buy (ZAR and Union) is also worse.

 

Share this post


Link to post
Share on other sites
Pierre_Henri    14
Pierre_Henri
On 7/30/2017 at 10:53 PM, jwither said:

I don;t see that there are ever going to be any noticeable number of REAL collectors for the KR, whether proof or "business strike".  But then, stating this is undoubtedly an unpopular opinion, just as my prior comments contradicting the unrealistic expectations for Union and ZAR.

In my last post, I only stated one obstacle but there are at least two more.

The second one is that it isn't a real coin, just as other bullion NCLT isn't either.  It isn't remotely competitive to real collectors versus the alternatives which can be bought for the same money.

The second reason is that completing the full set is exorbitantly expensive because of the gold spot price, even without paying any numismatic premium.  It's no different than the US "First Spouse" series except that it costs even more.  The First Spouse series contains the portraits each president's wife, except I believe for those currently alive.  The metal content of this series is probably in the vicinity of $30,000 USD.  The mintages are quite low by US standards but this is misleading because the correct comparison is the number surviving (certainly near 100%) in "high quality".  By this measure. it is common.  The series also has ZERO numismatic appeal EXCEPT to "investors".  I'd say the real collector base probably numbers in the hundreds, if that.

In the US, there are a lot of "investor" buyers and others who aren't collectors at all who just buy whatever its supposed "scarcity".

What I describe for this series, it's pretty much an accurate description of the KR's perception, only worse.  It's worse because it's relative value versus the coins most SA collectors actually want to buy (ZAR and Union) is also worse.

 

I agree 

I was recently contacted by a person who wishes to sell his complete 1 Oz Krugerrand collection dating from the very first issue of 1967 to 2017 -- a collection that covers 50 years of collecting the full-sized Krugerrand series.  

He wanted to sell it as a collection and not each coin individually.  

I explained to him that it was only the 1968 frosted & 1992 issues that command a premium above the gold price - the rest were all bullion coins whose value depends upon the spot gold price and the R1/$ exchange rate of the day. 

He could not believe this, but that is that. 

Collecting bullion coins like the Krugerrand is actually a gamble as the gold (or silver) price will dictate the value and not its “collectability / numismatic / scarcity” value of which there is none. 

I also want to warn people who are buying the current silver Krugerrand at twice their silver spot price currently – you are going to burn your fingers terribly – they are only worth their silver spot price plus a very small premium because of the large numbers minted.  

If mintage numbers are drastically reduced in the future, obviously the situation may change, but don’t bet on it ….

Share this post


Link to post
Share on other sites
gold creek    0
gold creek

Tell the gent to advertise his Kruger set on bob and individually he will fetch far over bullion price....lots of us on his mission that are looking for a number of years that are missing in our collection....

Share this post


Link to post
Share on other sites
jwither    10
jwither
On ‎8‎/‎5‎/‎2017 at 1:59 PM, gold creek said:

Tell the gent to advertise his Kruger set on bob and individually he will fetch far over bullion price....lots of us on his mission that are looking for a number of years that are missing in our collection....

Your own prior posts on this topic better support what Pierre and I wrote than your comment above.

In your comments in this topic, I haven't seen you say anything that indicates any actual interest in collecting.  In your first two posts, only the financial or "investment" considerations where you discuss the price and profit potential.  What exactly does this have to do with "collecting" and why would you expect anyone else to have a real interest in it as a collectible either?

This is hardly surprising since there is nothing numismatic about these "coins" other than the fact the KR is round (and not some other shape such as a bar) with the Kruger portrait and the Springbok as the design.  Not that it really matters, but at least other Non-Circulating Legal Tender (NCLT) have a nominal though totally meaningless face value.  Does the KR even have this?

From a numismatic and collectible aspect, this is the problem with all NCLT including the American Silver Eagle (ASE), Britannia, Panda, Mexican Libertad, Canada Maple Leaf....I think you get the idea.  There isn't much real collecting involved.  I'd say it is totally contrived though I know its advocates will dispute this claim. 

In the current environment, there are enough collectors for some NCLT (such as the USA ASE) to make it a collectible as with real coins, but even still, its disproportionately to a lopsided extent actually financial buying, aka "investing".  This certainly provides an opportunity to profit from changes in the metal price and in the premium to spot due as these as one of these issues increase or decrease in popularity.

Longer term, outside of the metal content, I rate the numismatic appeal for most NCLT as approaching zero.  The problem for all of these "coins" is that national mints are going to continue to issue it indefinitely.  There is a vast supply of this material, it's only going to get larger and little if any real collector interest especially in the gold due to the price.  Most are going to lost in a sea of obscurity.

Share this post


Link to post
Share on other sites
gold creek    0
gold creek

i communicated with Pierre...never asked for your one cent worth.....get over yourself and collect silver...

Share this post


Link to post
Share on other sites
Pierre_Henri    14
Pierre_Henri

Many South Africans collect / hoard precious metal coins as a protection against a weakening rand  

But it does not matter if you collect proof, circulation or bullion coins – there is one “problem” that faces us all – especially South Africans with our weak Rand currency 

That “problem” is the grading-costs asked by USA grading companies. It actually costs much more to grade a silver Krugerrand than the intrinsic silver value of the coin itself. 

An ounce of silver currently cost just over R200 but the NGC or PCGS grading cost must be at least TWICE that amount. 

So to get R200 worth of silver graded, will cost you R500+. Add to this your shipping and other costs and the coin may cost you upwards to R700, and it is still only worth its silver price of a little bit over R200. 

When it comes to gold one ounce coins, collectors are not that worried, as the R500 – R600 grading cost constitutes only a relative small % of the gold value of the coin itself with an intrinsic gold value of say R17 000.   

But why someone would wish to grade a business strike Krugerrand is a tangling question. 

So far NGC has graded 1835 non-proof one-ounce Krugerrands: –  

For example, only one 1992 coin has been graded making it obviously scarce in that sense. The coin that has been graded the most is the 2017 50th anniversary coin with 495 graded as MSDPL. 

A very strange observation is that a 1976 Krugerrand has been graded as XF40 – how did that happen? 

If one looks at say the Protea Silver R1 series, there are many collectors striving for the highest grades – the fact that the coin was never meant for circulation is not an issue to them, and like I have stated before – each to his own. 

The value of (graded) bullion coins will be determined by the demand for them, and although I do not agree with this sentiment, that is only my personal view. 

If collectors are willing to pay more than the spot price for graded bullion coins, that is that – the market will dictate and nobody else.  

Happy collecting!  

Share this post


Link to post
Share on other sites
jwither    10
jwither
On ‎8‎/‎10‎/‎2017 at 2:38 PM, gold creek said:

i communicated with Pierre...never asked for your one cent worth.....get over yourself and collect silver...

Figures I would get a response like this one.  I provide a reply which contradicts your preference and you don't like it.

Here is a tip for you.  If you want to communicate privately, send them a PM.  This is a public forum.

And by the way, I don't collect either silver or gold NCLT.

Share this post


Link to post
Share on other sites
jwither    10
jwither
5 hours ago, Pierre_Henri said:

Many South Africans collect / hoard precious metal coins as a protection against a weakening rand  

But it does not matter if you collect proof, circulation or bullion coins – there is one “problem” that faces us all – especially South Africans with our weak Rand currency 

That “problem” is the grading-costs asked by USA grading companies. It actually costs much more to grade a silver Krugerrand than the intrinsic silver value of the coin itself. 

An ounce of silver currently cost just over R200 but the NGC or PCGS grading cost must be at least TWICE that amount. 

So to get R200 worth of silver graded, will cost you R500+. Add to this your shipping and other costs and the coin may cost you upwards to R700, and it is still only worth its silver price of a little bit over R200. 

When it comes to gold one ounce coins, collectors are not that worried, as the R500 – R600 grading cost constitutes only a relative small % of the gold value of the coin itself with an intrinsic gold value of say R17 000.   

But why someone would wish to grade a business strike Krugerrand is a tangling question. 

So far NGC has graded 1835 non-proof one-ounce Krugerrands: –  

For example, only one 1992 coin has been graded making it obviously scarce in that sense. The coin that has been graded the most is the 2017 50th anniversary coin with 495 graded as MSDPL. 

A very strange observation is that a 1976 Krugerrand has been graded as XF40 – how did that happen? 

If one looks at say the Protea Silver R1 series, there are many collectors striving for the highest grades – the fact that the coin was never meant for circulation is not an issue to them, and like I have stated before – each to his own. 

The value of (graded) bullion coins will be determined by the demand for them, and although I do not agree with this sentiment, that is only my personal view. 

If collectors are willing to pay more than the spot price for graded bullion coins, that is that – the market will dictate and nobody else.  

Happy collecting!  

I agree with your comments.

The point I was trying to make which was disliked is that most of these buyers are doing what you state, speculating on the spot price of the metal in a
"collectible" format.  For the gold KR, I don't believe any of them are though I'm sure I'll get disagreement on that also.  The silver KR I can see it because the outlay is nominal.  With 87,000 now graded, I presume the usual suspects are mass marketing it predominantly to non-collectors, whether in South Africa or elsewhere.

In the initial post, the comment implied surprise at the "weak" prices.  Well, there is no reason to expect the buyers of this material to have any real affinity for it for the exact reason you state.  That's what I was trying to explain though with my usual lengthy replies.

I have never said that anyone should not buy anything if that's what they want to do.  However, what I have seen consistently on this forum is that comments are presented from a financial aspect, these comments make it self-evident that they aren't really interested in collecting and yet they expect others to think differently.  I've seen it repeatedly for Union and ZAR since I joined this forum, occasionally for RSA such as with the 2008 90th BD 5R, on one occasion for errors generically and now bullion.

If someone wants to buy NCLT, go ahead and do it.  Bought in line with the trend in the spot price, it can function as a hedge especially for a relatively weak currency such as the Rand.  As a collectible though, if there is a reason to believe that this stuff has any longer term prospect to appreciate, I have yet to read any reason to believe it.

Share this post


Link to post
Share on other sites

Please sign in to comment

You will be able to leave a comment after signing in



Sign In Now

×