Before a Krugerrand ever reaches a buyer’s counter, many South African sellers have already shortchanged themselves on paper, and The Gold Avenue wants that to stop. The Illovo company, which buys gold, diamonds, luxury watches and Krugerrands, is using October to highlight a common miscalculation. A large number of Krugerrand holders estimate their coin’s value by taking 91.67 percent of the gold price, reasoning that the coin is 22 carat gold. The logic seems sound, but it is mistaken, and it leaves the seller expecting about 8 percent less than the gold in a full ounce Krugerrand is really worth.
The season makes this especially relevant. Spring has arrived in Gauteng, and in The Gold Avenue’s experience selling follows a seasonal rhythm, with summer reliably busier than winter. As more people consider cashing in Krugerrands they bought long ago or inherited from relatives, the company would like them to walk in with an accurate starting figure, not one they have mistakenly lowered at the kitchen table.
The source of the error
Krugerrands are struck from 22 carat gold, an alloy of 91.67 percent gold and 8.33 percent copper. Seeing that percentage, many sellers conclude that a one ounce coin must hold 91.67 percent of an ounce of gold, so they multiply the gold price by 0.9167.
In fact the coin was built in reverse. A one ounce Krugerrand contains a full troy ounce of fine gold, with the copper added on top instead of being blended into a set weight. That explains why the coin weighs 33.930 grams gross, compared with the 31.103 grams of a troy ounce. Its owner does not have 91.67 percent of an ounce of gold. They have an entire ounce of gold together with a little copper.
For a full ounce Krugerrand, then, the right multiplier is 1.0 rather than 0.9167. The smaller coins work the same way: a half ounce contains exactly half an ounce of fine gold, a quarter contains a quarter and a tenth contains a tenth.
How 8 percent adds up
A shortfall of around 8 percent may not sound like much. Applied to one full ounce Krugerrand at current rand gold prices, though, it represents real money. Across a collection of several coins the gap widens fast, and it can colour how a seller reacts to each offer put in front of them.
Underestimation is only part of what worries The Gold Avenue. A seller relying on the wrong figure has no dependable way to tell whether an offer is fair. If they think their Krugerrand is worth less than it really is, they might take an amount that seems generous next to their own calculation yet falls well short of what the gold justifies.
A quick check before visiting any buyer
Anyone intending to Sell Krugerrands is encouraged by the company to do a quick calculation on their phone before approaching any buyer, The Gold Avenue included. It requires just three pieces of information:
The first is the international gold price in US dollars per troy ounce. The second is that day’s rand to dollar exchange rate. The third is the size of the coin, entered as 1 for a full ounce, 0.5 for a half, 0.25 for a quarter and 0.1 for a tenth.
Gold price multiplied by the exchange rate produces the rand value of one ounce of gold. Multiply that by the coin size and you have the value of its gold content. This number is a ceiling, not an offer, and no dealer will pay all of it, but it hands the seller a benchmark for weighing up and discussing whatever offer they receive.
The Gold Avenue publishes an in-depth guide to how the Krugerrand price in rands is put together, covering the rand gold price history since 1999 and why the value shifts every trading day. It deliberately avoids posting a fixed rand amount for a Krugerrand, since the gold price and the rand both move constantly and a figure quoted today will not hold tomorrow.
The gap between gold value and an offer
The company is candid that no dealer pays the full value of the gold content. Its offers are based on what the trade will pay on the day, which already sits below spot. The gold price can also shift between when a dealer buys and when it sells on, and carrying that risk has a cost. Verification, handling and compliance all consume time and money, and the business must earn a margin.
According to The Gold Avenue, sellers should not expect the gap to disappear. They should look for a buyer willing to explain it. One who lays out the day’s gold price, the exchange rate, the coin’s size and how the offer is derived from them can be properly evaluated. A bare number with no explanation gives the seller nothing to check.
Fractional and proof coins
The ounce miscalculation is not the only pitfall. The Gold Avenue often sees halves, quarters and tenths handled sloppily, whether grouped with full ounces or rounded down at the seller’s expense. Every size deserves to be priced on its own fraction of an ounce, and The Gold Avenue weighs and verifies each one separately.
Proof Krugerrands fall into a category of their own. They carry a mirror like finish, typically arrive in presentation packaging with a certificate, and are evaluated differently from ordinary bullion coins. Sellers with proofs should mention them before the assessment starts. They should also avoid cleaning or polishing any Krugerrand, since polishing harms the surface and can only lower its value.
Selling at the Illovo office
Sellers can phone, WhatsApp, email or book online, and walk-ins are welcome during business hours. In a private booth, a Purchasing Consultant weighs every Krugerrand and verifies it on a Niton XRF analyser in full view of the seller. The offer is explained before anything is decided, valuations cost nothing and there is no obligation to sell.
Once a seller agrees, their details are recorded on an iPad and they sign a one page Sale Agreement electronically. Payment is by immediate EFT, clearing immediately across participating South African banks, or in cash, subject to identification, compliance and the cash held on site. Bigger cash payouts require a few business days’ notice. Most visits last ten to fifteen minutes, and repeat clients frequently wrap up in less than five.
All purchases comply with FICA, so sellers must bring a South African ID, passport or South African driver’s licence along with proof of banking details. Those outside Gauteng can arrange a secure courier, while home or office appraisals are offered within the province. Sellers who need cash now but may want their Krugerrands back later can ask about a Buyback Agreement, where The Gold Avenue purchases the coins and the seller has the option to buy them back on an agreed date at a price fixed upfront.
Sellers better prepared this season
Since opening in April 2022, The Gold Avenue has served over 3,000 clients and holds a 5.0 Google rating. The company believes that sellers who understand the gold content of their holdings are easier to work with, more certain of their choices and more likely to come back. Setting the record straight on the 91.67 percent assumption is among the simplest ways to level the playing field between sellers and buyers ahead of the year’s busier months.
Learn more at https://thegoldavenue.co.za/
About The Gold Avenue
The Gold Avenue purchases gold jewellery, diamond jewellery, luxury watches and Krugerrands from a secure office on the 8th floor of Illovo Point, 68 Melville Road, Illovo, Sandton, 2196. Founder and Managing Director Trent Saldsman established the company in April 2022. It is a registered second hand goods dealer under the Second-Hand Goods Act, is registered with both the National Credit Regulator and the Financial Intelligence Centre, and belongs to the Second-Hand Dealers and Pawn Board and the Jewellery Council of South Africa. The business draws on an extensive local and international dealer network. Office hours are Monday to Thursday from 08:00 to 17:00 and Friday from 08:00 to 16:00, with Saturday visits by pre-booked appointment only.
Media Contact
The Gold Avenue
Email: sales@thegoldavenue.co.za
Phone: +27 10 109 0080
Website: https://thegoldavenue.co.za
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