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Investors go for gold coins

By Adriana Stuijt     Dec 21, 2008 in Business
Johannesburg. The demand for gold coins from South Africa has soared, says Len Sham of the SA Gold Coin Exchange."People strive to take charge of their own financial destinies in an uncertain investment world,' he says. And US gold-coin dealers agree.
The demand for Krugerrands and collector coins such as the Krugerrand and the Mandela Coin has been phenomenal over the past five years - but has soared to new heighs over the past three months.
In October inside South Africa, a Krugerrand weighing one ounce was worth R7,300, two months later its value stood at R8,500. Sham: 'the recent credit crunch has led to a further uptick in demand for coins across the world -- many countries are asking South Africa for Krugerrands due to their own short supply of coins.
In South Africa, the Krugerrands are especially popular: it serves as a rand-dollar hedge that could be sold back to the Exchange for cash at any time,' he noted.
"People like the fact that Krugerrands are tangible investments that would still hold value if the economic system collapses. Personally I would much rather be in possession of gold coins than paper under those circumstances," he said.
The fact that Krugerrands and the value thereof were so well-known worldwide, meant that investors could easily sell their coins to dealers anywhere. The Krugerrand is rated as one of the top 300 brands in the world.
Spokesman for top US dealer Blanchard and Co, says that with the stock market and other financial markets so volatile, many experienced and novice investors are turning to gold bullion. "Gold bullion holds its value and provides easier liquidity than most other investments.: see
"Krugerrands are durable. They are alloyed with a small amount of copper, making them 22-karat coins - containing 11/12 part 24-karat gold and 1/12 part copper. Copper is a traditional alloy of gold coins used to harden coins, making them hard enough to resist normal scratching and denting - an important feature, as 24 karat coins and bars are more easily damaged and generally require protective packaging.
"Krugerrands are easy to transport and store. Since the Krugerrand is so well recognized, buying and selling them internationally is exceptionally easy. "And under SA legislation they have always been legal tender, minted by the South African Mint. As legal tender coins, they do not need to be assayed or melted down upon resale - unlike some cast and minted gold bars, 'according to Blanchard's.
Back in South Africa, Sham also said that tourists now often purchase collector coins such as the local Natura Series sporting coins , and the various Mandela coins. : Investors in gold coins are unlikely to run into liquidity problems," he said.
Meanwhile South African pawn shops are also doing a booming business in top of the line luxuries -- wealthier people inside the country now are becoming 'increasingly desperate' to exchange their valuable goods for cash, Kevin Pretorius, owner of the Cash Crusadors pawn shop in Durbanville said. see
A R100,000 Rolex for R40,000...
Businessmen running pawn shops in Cape Town's inner city said they haven't had this many offers of top-valued goods from wealthy owners for the past 15 years. "One desperate man brought a Rolex watch valued at R100,000 - he was prepared to take R40,000 for it... ' said one unnamed pawn shop owner.
And Zayd Theba, the managing director of Gold World in Johannesburg also said that people were increasingly eager to 'sell their gold, most valuable coins, ' of late. "We are selling less gold coins and people offering theirs for sale also insist on much higher prices than before.'
Mrs Bina Genovese of Sotheby's in Cape Town, which auctions off antiques and art-valuables, says that in their field, people now seem to hang on more to their antique furniture, art works and collectors' items these days.
This was also confirmed by Jeremy de Mughn, deputy director of the South African Antique Dealers’ Association: "I expected a flood of valuable antiques on the market, but that's not what's happening.
"Perhaps people realise that their antiques still remain valuable investments.'
Antique dealer Clyde Terry of Parkhurst also confirmed this trend, noting: "valuable art works such as a Pierneef or an Irma Stern painting will always retain their value.' see
More about Gold, Krugerrand, South Africa, USA, Credit crunch hedge