Are Silver Krugerrands a Good Investment?

Most new silver investors are aware of the most recognizable coins in the world. The Britannia, Silver Eagle, and Silver Maple Leaf are instantly clockable to anyone who has spent even a few weeks in the bullion industry. For this reason, the Silver Krugerrand often flies under the radar of bullion coin enthusiasts. This is a shame, considering the coin’s fascinating history and unique numismatic value. 

The South African Mint released their first Silver Krugerrand in 2017, and the coin has since been a massive hit among bullion collectors all over the world. The coin has capitalized on the success of the Gold Krugerrand and features a familiar combination of animal and cultural iconography on its reverse and obverse. 

Are silver Krugerrands a good investment? We’ll walk you through the advantages, risks, and background behind one of the world’s newest and most exciting silver bullion coins. 

Understanding Silver Krugerrands

Investors who want to start stacking or collecting Silver Krugerrands should first familiarize themselves with the history and background of the coin. Although the South African Mint has only been producing the new Silver Krugerrand since 2017, the history of the coin itself spans over 50 years. 

History and Background

South Africa’s government mint first produced their Gold Krugerrand in 1967 in an effort to encourage the private collection of gold bullion. Its obverse design is much older; the Paul Kruger profile it depicts was initially drafted by artist Otto Schultz in 1892. Kruger himself is a controversial figure, especially in the United States. In fact, the United States actually banned the import of the Gold Krugerrand in 1985. 

Despite this fact, the U.S. has remained one of the most popular purchasers of the Gold Krugerrand. Following the dismantling of apartheid in South Africa, the majority of U.S. sanctions were repealed in 1991. This allowed a whole new generation of Americans to enjoy and celebrate one of the most beautiful gold coins in the world. Why are Silver Krugerrands a good investment? The coin’s fascinating history is a big reason why investors flock to the coin each year. 

Comparison to Gold Krugerrands

Are Silver Krugerrands a good investment compared to other gold or platinum coins? The good news for fans of the original Gold Krugerrand design is that the silver version of the coin remains largely unchanged. Minted with .999 pure silver bullion, the coin’s brilliant finish puts Paul Kruger’s likeness on full display. On the reverse, the familiar Springbok antelope gallops on top of grasslands with mountains in the background. The Springbok is native to South Africa and adds an additional layer to the cultural importance associated with the Silver Krugerrand. 

Pros of Investing in Silver Krugerrands

Investing in Silver Krugerrands is a popular method of silver stacking among bullion collectors. Why are Silver Krugerrands a good investment for stackers? In the next section, we’ll explain some of the main reasons why so many collectors choose to invest in Silver Krugerrands. 

Tangible Asset and Inflation Hedge

Like all bullion coins, the Silver Krugerrand is a tangible, physical investment. Many gold and silver enthusiasts prefer investing in coins to intangible assets like stocks or bonds. This is because coins like the Silver Krugerrand can also serve as hedges against inflation. While the price of the U.S. Dollar directly influences the value of stock investments, gold and silver are traded primarily based on the spot price of their precious metals. Additionally, financial experts agree that bullion has intrinsic value. Are Silver Krugerrands a good investment to hedge against inflation?

It’s a common strategy for financial experts to invest at least some money in gold or silver coins, and doing so can help to offset the negative impact of inflation or financial crisis on more traditional stock investment portfolios. 

Reputation in the Precious Metals Market

The Krugerrand has an excellent reputation within the precious metals market. For decades, the Krugerrand has been one of the most popular coins all over the world, and it sells especially well in the United States. Krugerrands carry an exciting history with them – which other coins have been banned and unbanned in multiple countries? Investors often want to know: are Silver Krugerrands a good investment because of their exceptional reputation among collectors? 

Each Silver Krugerrand also carries with it the exceptional craftsmanship of the mint experts at the South African Mint. The strikingly detailed features of Paul Kruger stand out brilliantly against the high-purity silver of the background. And on the reverse, one of South Africa’s most recognizable animals bounds majestically across the plains. The beautiful appearance of the Silver Krugerrand is one reason behind its explosive global reputation. 

Affordability and Accessibility 

As a government-backed coin, Silver Krugerrands often cost an additional premium over the spot price of silver. This isn’t unique to Krugerrands; almost every government bullion coin requires buyers to pay substantial premiums, especially when compared to bullion bars or rounds. Are Silver Krugerrands a good investment for collectors on a budget? 

Silver Krugerrands are extremely accessible. Because of their sustained popularity over many years, consumers shouldn’t anticipate any trouble finding a Krugerrand if they want one. And compared to some silver coins, the Silver Krugerrand is relatively inexpensive. The Britannia, for instance, typically comes with a much higher premium than the Krugerrand. 

Risks and Challenges

There are risks to every bullion investment. Read on to learn a few of the main considerations investors should keep in mind before putting their money in Silver Krugerrands. Before you can answer, “are Silver Krugerrands a good investment,” smart investors should have a clear understanding of the risks and challenges associated with this unique bullion item. 

Volatility in the Silver Market

The silver market is notoriously volatile. In addition to being far less consistent than gold price trends, silver’s spot price has historically experienced both dramatic increases and significant falls. While the price of silver might be stable now, this could change in the future. The good news is that coins like the Silver Krugerrand offer numismatic value outside of their pure silver content. Are Silver Krugerrands a good investment, despite the volatility of the silver market? Their numismatic value can help to answer this question for you. 

Liquidity and Selling Challenges

The Silver Krugerrand can be easy to sell, but it might not be as liquid as other silver investment products. The Krugerrand also isn’t sold in denominations under one ounce. This presents an additional obstacle for some investors; it’s hard to want to part with a full ounce of silver at one time. 

Like the spot price of silver, demand for the Silver Krugerrand can also be occasionally unpredictable. If public interest in the Krugerrand tanks, it can become harder for investors to offload their investment through resale. 

Economic and Geopolitical Factors

While there’s little risk of another embargo making Krugerrands difficult to move, economic and geopolitical factors can influence the value and return of your investment. Krugerrands are more popular in some parts of the world than in others. For example, a significant percentage of Gold Krugerrands sold end up in the United States. Investors who are looking to sell their Silver Krugerrands should consider shipping costs, especially if they live in a country where selling their coins locally might prove difficult. 

Factors to Consider Before Investing 

A certain type of investor might benefit greatly from purchasing Silver Krugerrands. Other investors should consider looking into different types of silver bullion, such as coins, bars, or precious metal ETFs. 

Financial Goals and Time Horizon 

Your financial goals should be the number one priority when you look for silver coins to invest in. When it comes to the Silver Krugerrand, your tolerance for long-term risk is an important factor to keep in mind. The price of silver can be volatile, and silver’s spot price is a major component of the overall value of a Silver Krugerrand. Are Silver Krugerrands a good investment in the short-term? We tend to consider this coin more of a long term investment, as the volatile price of silver makes it difficult to secure reliable short profits.

In the long term, a numismatic coin like the Silver Krugerrand can appreciate significantly in value. Collectors often look for older coins in the series to complete their collection. Since Silver Krugerrands are also relatively new, buying these coins now can help to improve your odds of securing a profit in the future. 

Portfolio Diversification and Risk Management 

Are Silver Krugerrands a good investment for people who want to expand and diversify their bullion portfolios? It’s never a great idea to put all of your eggs in one basket, and investment is no different. Buying silver coins from multiple different major mints can help you to avoid losing money if a single coin goes out of style. 

Personal Preferences

Personal preference also plays a role in determining whether or not it’s wise for you to invest in Silver Krugerrands. Some people love the look of the Krugerrand, while others might not be interested in the divisive likeness of Paul Kruger. Many people who choose to invest in Silver Krugerrands enjoy the detail of Kruger’s depiction, and the beautiful wildlife portrait on the reverse side of the coin. 

Expert Opinions and Market Analysis

Experts occasionally weigh in on the investment potential of the Silver Krugerrand. Below, we’ve included a few opinions and projections from bullion analysts to help you figure out the answer to your main question: are Silver Krugerrands a good investment? 

Insights from Financial Advisors

Financial advisors tend to approve of silver coin collection as a means of countering the risk of inflation. The fact that coins like the Silver Krugerrand are physical, tangible assets also helps to make them a welcome addition to any advisor-approved portfolio. According to Prestige Bullion director Richard Collocott, the Silver Krugerrand is a “immediate and unique property as an attractive asset class.” When we ask bullion experts, “are Silver Krugerrands a good investment,” the answer is frequently a yes. 

Historical Performance and Projections 

Historically, the value of the Gold Krugerrand has been tied closely to the spot price of the precious metal comprising it. This is frequently the case with bullion coins. But because the coin is such a fascinating historic collectible, some years’ Gold Krugerrands have appreciated considerably in value. Are Silver Krugerrands a good investment historically? 

It’s a bit harder to do an accurate price-trend analysis for the Silver Krugerrand. The coin is extremely new; it was first announced and released in 2017. If the Gold Krugerrand is any indication, new Silver Krugerrands purchased by investors might increase in numismatic value over time. 

Market Trends and Influences

The value of the Silver Krugerrand is largely dependent on the spot price of silver. This can vary considerably from quarter to quarter, so investors who stack Krugerrands should pay close attention to market movements. But because the Krugerrand is such a popular collectible item, its value isn’t quite as simple as the spot price of silver. 

The availability (or scarcity) of similar silver coins might also impact the value of the Krugerrand. Additionally, future collectors might pay a premium to grab ahold of older Krugerrands. Are Silver Krugerrands a good investment given current market conditions? Only you can answer this question, and only extensive research can help you figure out if Silver Krugerrands are right for you. 

Case Studies and Success Stories

Many silver stackers have made thousands of dollars in profit from collecting silver coins. In this section, we’ll discuss how some investors have secured impressive profits from their collecting efforts. 

Real-Life Examples of Successful Investors 

CNBC once reported on a growing group of coin collectors who made millions of dollars from hunting rare and valuable coins. These entrepreneurs were sorting through coin rolls instead of buying bullion coins from dealers, but the message is still the same: gold and silver coins can become valuable investments – not just a hobby. Are Silver Krugerrands a good investment because of use-cases like this one? Maybe not. After all, most investors won’t find a million-dollar coin at a garage sale or pawn shop. Still, these real-life examples help to demonstrate how collecting rare bullion coins can quickly build a solid portfolio. 

Factors Contributing to their Success

Whether someone made a million bucks after stumbling into a rare coin from the 1700s or a couple hundred dollars from selling their long-term bullion investments, the lessons are often the same. Successful investors closely track the value of silver, identify coins with significant long-term appreciation potential, and diversify their portfolios.

Even in the example above, successful coin-roll hunters made their money from identifying and searching for the most valuable collectible coins. Why are Silver Krugerrands a good investment with significant value appreciation potential? Surveying the success stories of others can help you answer this question. 

Alternatives to Silver Krugerrands

As you likely already know, the Silver Krugerrand is not the only way to invest in silver. Depending on your financial situation and goals, you might consider other investment and stacking options, such as silver rounds, bars, or even silver ETFs. 

Other Silver Bullion Coins and Bars

The world is filled with fantastic silver coins. The Britannia, the Austrian Philharmonic, the Silver Maple… the list goes on. But there’s far more out there than coins. Silver bars, for example, offer a lower premium over spot, allowing savvy investors to save substantial money while expanding their precious metal holdings. 

To determine which silver product is right for you, consider what your investment goals are. Investors who are interested in the collectible value of silver products should buy silver coins like the Silver Krugerrand, but people who want as much silver as possible usually prefer silver bars. Are Silver Krugerrands a good investment for optimal silver content? Probably not. Silver bars offer similar purity levels at a much lower premium cost. 

Silver ETFs and Mining Stocks

If the idea of keeping, storing, and eventually selling physical bullion products stresses you out, consider a silver ETF or mining stock. Mining stocks allow investors to profit directly from the thousands of silver and gold mines around the world. ETFs pay out dividends to investors as the spot price of a precious metal – like silver – increases.

Pros and Cons of Alternatives

Are Silver Krugerrands a good investment, or should collectors turn toward ETFs and mining stocks to build their precious metals portfolios? While ETFs and mining stocks provide an excellent option to investors who want to profit from silver without filling their homes with physical precious metals, there’s something to be said for the security of a physical asset like silver. Holding several Silver Krugerrands helps you keep a tangible counter to inflation. Plus: how could an ETF ever look as beautiful as a .9999 pure silver coin? 

Final Thoughts: Investing in Silver Krugerrands

Silver Krugerrands are the latest addition to a long line of Krugerrand coins. Since their initial release, investors have loved the coin, which features an homage to a famous South African animal and a controversial political leader. But are Silver Krugerrands a good investment for your needs? 

Before investing in Silver Krugerrands, take some time to consider how the coin fits into your investment objectives and long-term goals. If you have any questions about Silver Krugerrands, we’d love to speak with you. Contact our customer service team for more information about how Silver Krugerrands might fit into your growing investment portfolio.