When you buy a Krugerrand, you’re not just buying gold — you’re owning a piece of South Africa’s gold heritage. But many investors ask: why does a Krugerrand cost more than the “gold price” I see online? Or why does it seem so expensive?
Let’s unpack what drives Krugerrand pricing 👇
The spot price is the global benchmark for gold — the live price quoted in international markets like London and New York for unallocated gold (IOUs for gold, not physical coins). It changes every second, reflecting global supply, demand, and currency movements.
This is the paper gold price you see on financial websites. It’s the base from which all physical gold products — including Krugerrands — are priced.
South Africa’s Krugerrands are produced and minted by Rand Refinery and the SA Mint (an arm of the South African Reserve Bank), from refined physical gold. This process adds real-world costs — fabrication, minting, insurance, logistics, and dealer margins — creating what’s known as the premium over spot.
That premium typically ranges between 6% and 10% for a 1oz Krugerrand in the retail market, when buying from a dealer. The costs baked into the premium are traditionally:
Rand Refinery fabrication costs and profit margin = 4.5% to 5%,
Krugerrand Dealer(s) costs and profit margin = 1% to 5%.
Smaller KR fractional coins, like the tenth, quarter, and half ounce Krugerrands, carry higher premiums due to the same manufacturing costs per gram being applied on a smaller coin. These premiums traditionally range between 20% to 30% above the gold spot price.
Gold ETFs and offshore cast bars often trade closer to spot (with premiums under 1–3%) because:
They don’t include minting or delivery costs. Cast bars are simply cast, and never minted or further processed thereafter.
They represent claims on large, pooled bars stored in vaults — not direct ownership of the physical. Gold ETF’s are financial instruments ie. debentures, issued by the ETF provider, committing the bank or issuer to provide the buyer returns dictated by the gold price action in a denominated currency.
However, those paper instruments come with counterparty risk i.e credit risk of the issuer. When you buy a Krugerrand, you own real, allocated gold — not a promise of gold.
VAT-exempt under South African law
Globally recognised and easy to liquidate
Tangible, sovereign gold ownership
Made by Rand Refinery, an LBMA-approved refiner
🇿🇦 The Troygold Advantage
Through Troygold, you can now buy fractional amounts of a 1oz gold Krugerrand i.e. in the form of co-ownership or full ownership. This is known as Digital Gold, because a technology company like Troygold digitises a full coin, and then fractionalises or splits it into a million digital ownership pieces, registered to a central ledger.
So from as little as R10, you can invest in a gold Krugerrand at the same price premiums as the 1 ounces - safely stored, audited, and linked to your account. You can access your account from your favourite browser or device via a mobile app, desktop app, or WhatsApp app. That’s the power of real gold, made digital.
Owning gold isn’t just about the price — it’s about direct legal ownership, accessibility, safety and price efficiency at every currency price point.
