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GROOVIE MOVIES

2018 Silver Krugerrand

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GROOVIE MOVIES

Good day all

 

I've come across an article stating the SA mint plans on striking 2018 silver krugerrand at bullion price to diversify SA's Krugerrand exports. SA falling gold output (though the article mentions 2016 being a bumper crop year, not seen since the 80's in terms of kruger sales) has encouraged the rand refinery to look into marketing bullion silver. That being said, I wonder if South Africa produces enough silver as by product of our gold mining to meet the demand for a international silver bullion coin. One of the main reasons silver is so expensive in SA is that we are not a leading global producers as is the case with gold.

Though I welcome the notion of a krugerrand at silver bullion prices, I can't also help but wonder how it will affect prices on our old silver coinage such as silver rands and crowns which fill the bullion gap in the SA market. 

https://www.businesslive.co.za/bd/companies/mining/2017-08-17-krugerrand-maker-seeks-silver-lining/

regards Robert

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jwither

It's my belief that the 2017 version of this coin will ultimately be a money loser.  Too many at too high a price to maintain the premiums I have heard described.  If 2018 and subsequent years are struck, it will be even worse, as the novelty effect will vanish and I'd rate the chances of a series of this coinage at current premiums to the 2017 as just above zero.

If the SA Mint intends to strike this coinage regularly, my recommendation is both of the following:

One: Strike it as a proof with a limited mintage, similar the British Brittania, Chinese Panda and Mexican Libertad.  These can be struck in SA using locally sourced silver and might be longer term competitive near the price of the 2017 but only with a much lower mintage, as in less than 10,000.

Two: Strike bullion coins primarily or exclusively elsewhere to source cheaper silver to sell it at a competitive price.  These would need to be sold at nominal premiums to spot, just as the USA ASE or Canadian Maple Leaf.

As for your last question, I don't know.  Currently, I don't see the 2017 silver KR competing with this "junk" silver because of the premiums.  If the silver KR is issued regularly at reasonable premiums, I would expect buyers to prefer it and the coinage you describe to sell for less than melt value.

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Coin Database

Just my 2c... but, I think the SA Mint will continue to mint the Silver Krugerrand in both Proof and UNC coins. This is a big money-spinner for them and silver is the more affordable coin the average Joe can afford. From the reports I have read in the US, UK and Germany, the 2017 silver Krugerrand was a flying success for the Mint and I see no reason why they would not mint a 2018 version either.

That being said, I agree, initially these coins sold at massive prices. I know of a few sellers who bought proof silver Krugerrands at R1000, or less, and sold them at R13k+ on eBay. This was the fastest way of becoming a millionaire, because there was a massive demand for them. But, prices have come down since, and they are no longer trading at the prices it did from March to August 2017. I believe that the 2017 silver Krugerrand will keep some of its value, especially the graded FDOI's, Early or First release coins, even though these coins sold at crazy high prices.

If the Mint wants to make a success of any further Silver Krugerrand sales from 2018 and beyond, they will need to get them to the market at close to bullion value. If not, I am convinced that sales will fall flat, as most would rather settle for the Silver Eagles.

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EWAAN Galleries
18 hours ago, Coin Database said:

Just my 2c... but, I think the SA Mint will continue to mint the Silver Krugerrand in both Proof and UNC coins. This is a big money-spinner for them and silver is the more affordable coin the average Joe can afford. From the reports I have read in the US, UK and Germany, the 2017 silver Krugerrand was a flying success for the Mint and I see no reason why they would not mint a 2018 version either.

That being said, I agree, initially these coins sold at massive prices. I know of a few sellers who bought proof silver Krugerrands at R1000, or less, and sold them at R13k+ on eBay. This was the fastest way of becoming a millionaire, because there was a massive demand for them. But, prices have come down since, and they are no longer trading at the prices it did from March to August 2017. I believe that the 2017 silver Krugerrand will keep some of its value, especially the graded FDOI's, Early or First release coins, even though these coins sold at crazy high prices.

If the Mint wants to make a success of any further Silver Krugerrand sales from 2018 and beyond, they will need to get them to the market at close to bullion value. If not, I am convinced that sales will fall flat, as most would rather settle for the Silver Eagles.

Apparently the SA Mint is adjusting all prices - ‘maybe’ they have realized what a rip off they are by charging such ridiculous premiums over the spot price....

 

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GROOVIE MOVIES

With regards to the 2017 Krugerrand being so highly priced. I don't think the SA mint expected such a backlash from the international community on the premiums. Remember South Africans are used to shelving out R800 - R900 for commemorative 1 ounce crowns, however those crowns are always low mintages. I certainly wasn't surprised when the first silver Krugerrand was released at R600 a pop genuinely didn't think a million was a large number, when compared to how many eagles and kuks are out in circulation. But with annual releases follow on the horizon, the "novelty" is set to wear off as Jwither mentioned. 

I have read previously 480 000 of these 2017 Krugers were earmarked for the US through MCM distributor, 400 000 for Europe, and 120 000 for the remaining global distribution. Not sure if they achieved these sales with the high premiums though.

Another question would be is, would they stop minting of those million krugers if sales stagnate? We have seen this with the mintages of commemorative coins where the official numbers listed on the certificate are many times not met due to lack of interest and minting is just halted. The result being you have a coin with an official mintage of 10 000, but in reality only 3900 coins were struck for example. 

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GROOVIE MOVIES

The SA mint has just released the 2018 Krugerrand range and a normal circulation silver krugerrand price isn't listed!

At R895 (no surprises) only the silver proof krugerrand is listed in the 2018 range with a maximum mintage of 15900 limited to 15000 as per the certificate of authenticity.

One BOB seller has already put 5 of these coins on auction.

So the question I'm waiting in anticipation  to be answered is, will a normal circulation silver krugerrand be launched at a bullion price?

 

regards Robert

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jwither
5 hours ago, GROOVIE MOVIES said:

At R895 (no surprises) only the silver proof krugerrand is listed in the 2018 range with a maximum mintage of 15900 limited to 15000 as per the certificate of authenticity.

Too high a price for the mintage in my opinion.  I'm dubious there are enough local buyers to support the price and it's more common versus what I believe to be more preferred alternatives, such as the Chinese Panda, British Britannia and Mexican Libertad.

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