Demand for Krugerrands up as consumers diversify

13th June 2024

By: Darren Parker

Creamer Media Contributing Editor Online


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Financial institution First National Bank (FNB) says it has seen strong demand from clients buying Krugerrands on its trading platforms as consumers embrace alternative asset classes to diversify their investment portfolios.

Over the past year, FNB assisted with facilitating the delivery of over 2 200 Krugerrands on its trading platforms.

“FNB currently holds over R1-billion worth of coins in its portfolio on behalf of its clients. This milestone underscores the trust that clients have placed in FNB as their preferred financial and investment partner.

“This further demonstrates that FNB customers are diversifying their investment portfolios to hedge against unfavourable market conditions,” FNB Wealth and Investments share investing head Sebastian Pillay says.

In periods of global market uncertainty, coupled with slow economic growth, gold has consistently maintained its reputation as a safe haven, he adds. Pillay notes that some investors buy gold as a sentimental investment, while those who are extra cautious about financial market movements, buy Krugerrands as a sense of comfort for their investment portfolios. 

“Krugerrands are linked to the international value of gold, which means that the investment is protected from local currency volatility and devaluation, therefore this makes it a global asset class that you can rely on in a good market environment as well as in times of uncertainty.  

“Moreover, the recent surge in the gold price has led to a significant increase in demand for Krugerrands,” he points out.

He says Krugerrands, since their inception decades ago, have become a first-choice safe haven for many investors when considering getting exposure to gold. They are often used as a hedge against inflation and currency fluctuations.

“Krugerrands are highly liquid in the South African market, making them a preferred choice among seasoned investors and collectors alike and are considered a legal tender in South Africa, but their real value lies in their gold content.

“Whether acquired for portfolio diversification, wealth preservation or numismatic appreciation, Krugerrands continue to perform in the realm of precious metals and serve as a cornerstone investment in precious metals,” Pillay concludes.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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