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It's back, but no one is certain that it really ever left. South Africa released its 2000-dated gold bullion Krugerrand coins in October 1999 as a way of re-introducing the coin with a millennium marketing angle.

The South African government issued a limited edition Proof coin accompanied by Uncirculated business strikes issued by Rand Refinery Ltd. Both were unveiled Oct. 14 at a press conference in New York.

The re-invention of the bullion coin will be necessary if the coin is to gain any significant market share in the United States. This became quite obvious from the statements made by government and private industry spokesmen selling the coin who attended the press conference. A spokesman for Republic National Bank said, "Clients need to be made aware of the coin," a spokesman for A-Mark Precious Metals said the new issue should be popular with "people who want 2000-dated coins" and a spokesman for MTB Bank added he also saw a market opportunity with people seeking coins with the date 2000 on them. The MTB Bank spokesman also noted competition would be tough. The well-entrenched American Eagle gold bullion coin, now the most popular gold bullion coin available in the U.S. bullion coin market, is the primary coin against which the Krugerrand must compete.

The Krugerrand never really left, but the perception among many people is that production of the coin had ceased. The Krugerrand was first introduced in 1967 as a practical way to own gold. Gold purchased in ingot or nugget form often requires a costly and time consuming assay to determine the purity and quantity of gold to be purchased or sold at the time. A coin has the advantage of a quick authentication with the surety of the purity and quantity of gold in it. The Krugerrand dominated the world gold bullion coin market until 1985, when President Ronald Reagan signed an executive order banning the import of the coin as part of a U.S. protest against South Africa's racially separate policy called Apartheid. Other countries soon lined up to support the ban on South African goods, including on the Krugerrand coin. The Canadian gold bullion Maple Leaf coin quickly moved in to fill the void. The Krugerrand was unable to make a comeback, even after sanctions against the import of the coin were lifted by most countries during 1992.

At one brief point of several days during the ban period, the Krugerrand actually traded on the gold bullion markets at below the spot price of its precious metal content. This was quickly corrected when it was realized if investors would not purchase the coin, the coin could be melted and a profit still made from its gold content.

South Africa did make an effort to get around the bans on the Krugerrand during the 1985 to 1992 period by launching the Protea series of bullion coins or medals. South Africa uses a currency system based on the rand, making the Protea "denomination" a stretch regarding credibility as a legal tender issue. What is not well known to many bullion traders and coin collectors is that the Krugerrand was continuously struck during the years in which it was banned by the United States and other countries. However, the quantities in which it was struck are significantly lower. As an example, the mintage in 1991 was 1,501 pieces. In 1995 the mintage is only 750 pieces, making even the Uncirculated bullion version of the coin attractive to collectors.

In more recent years following the lifting of sanctions against importation of the coin, the Krugerrand has continued to be produced despite the public perception otherwise. But the coin has still failed to gain back much its lost market share. This is a major consideration regarding re-launching the coin at a New York press conference, releasing 2000-dated coins before the calendar year 2000 had begun.

Can the Krugerrand regain this market share? There is a lot more competition out there than there was in 1985. At the time this article is being written in late 1999, gold is not particularly glamorous as an investment vehicle considering a lack of worldwide inflation. Times have changed. The question is, will the Krugerrand change with the times?

Richard Giedroyc is a numismatic writer, researcher, auction cataloger and coin dealer. He has been in the hobby and business most of his life, now having more than three decades experience in this fascinating hobby field. During this time Giedroyc has been the owner of Paris Bergman Galleries, owner of Classical Coin Newsletter, international editor of Coin World and owner of Giedroyc-Anderson Interesting World Coins. He is currently a numismatic consultant. He has written more than 2,000 byline numismatic stories and contributed to several coin catalogs.

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