Sales manager at the South African Gold Coin Exchange Len Sham says the demand for Krugerrands and collector coins, such as the Mandela Coin, has been phenomenal over the past five years as the rand weakened and the gold price strengthened.
The recent credit crunch has led to a further uptick in demand for coins across the world, as seen in the fact that many countries are asking South Africa for Krugerrands due to their own short supply of coins.
The Krugerrand coins were worth their intrinsic value in gold and an example of how investment in coins can work in a volatile exchange rate environment was the fact that a Krugerrand weighing one ounce was worth R7,300 in October this year versus its current value of R8,550. The Mandela coins have proved a particularly good investment for those who purchased them at R4,000 in 2004 through rarity and metal price appreciation.
Sham said they advise investors who want to buy gold coins to invest 30% of their money in collector's coins that they typically have to keep for two to three years to make returns on this investment, and 70% in Krugerrands that could be sold at any time to prevent cash flow problems.
The fact that Krugerrands and the value thereof were so well-known over the world meant that investors could easily sell their coins to dealers in any place in the world. The Krugerrand was in fact rated as one of the top 300 brands in the world.