Bullion Pricing, Delivery and Storage
How is the price of a Krugerrand calculated?
The short answer
A Krugerrand's price starts with the value of the fine gold it contains, worked out from the international gold price in US dollars and converted into rand at the current exchange rate. A dealer then adds a premium to cover minting, distribution, handling and its own costs and margin. Because both gold and the rand move during the day, the price you are quoted changes too.
The three building blocks of a Krugerrand price
Every Krugerrand price is built from three parts. The first is the metal value: a 1 oz gold Krugerrand contains one troy ounce of fine gold, and the fractional coins contain a half, a quarter or a tenth of an ounce. The second is the exchange rate, because gold is priced internationally in US dollars per troy ounce. The third is the premium, the amount a dealer charges above the metal value.
How the calculation generally works
In simple terms, a dealer multiplies the coin's fine gold content by the current dollar gold price, converts the result into rand and then adds its premium. The coin is struck from 22-carat gold, an alloy of gold and copper; the copper makes the coin harder wearing, but the price follows the fine gold content. Premiums are usually higher per ounce on smaller coins, because the cost of minting and handling a tenth-ounce coin is spread over less gold.
- Metal value: fine gold content multiplied by the gold price
- Currency: the dollar price converted at the current rand exchange rate
- Premium: minting, distribution, handling, stock costs and dealer margin
What the market decides and what Knox decides
The gold price and the exchange rate are set by global markets, and no dealer controls them. The premium, the coins held in stock and how often a quoted price is refreshed are matters of Knox policy. Demand plays a part too: when many people want to buy at once, premiums across the market can widen, and particular sizes or mint years can become harder to find.
Knox sets its Krugerrand prices twice each business day, on a morning (AM) price and an afternoon (PM) price.
Checking a quote before you buy
When you compare quotes, ask for the price per coin, the size and year of the coin, whether the price includes delivery or storage and how long the quote stands. Tax can also matter: gold Krugerrands are always zero-rated for VAT, but treatment depends on the product and the facts, so check SARS guidance or ask a tax practitioner if it affects your decision. Compare the total cost rather than the headline price, and remember that the gold price can fall as well as rise after you buy.
How Knox handles this
Ready for the next step?
Speak to the Knox team about your situation. They will confirm current pricing, availability and requirements before you decide.
