In an interview on SAfm @ 18:25 on 08 December 2008

Krugerrands hit record prices and there is a shortage of the coins - Alan Demby

In an interview on SAfm @ 18:25 on 08 December 2008

[miningmx.com] -- THERE is a shortage of Krugerrands as trade in the gold coin picks up, said Alan Demby, the executive chairman of the South African Gold Coin Exchange.

"Our turnover has increased dramatically in the last couple of months. I suppose the best hedge, if you will, against the turmoil has really been gold coins and Krugerrands," Demby said on SAfm Market Update. "Of course, gold has come off its highs, but our saving grace in the South African context has really been the rand/dollar exchange rate which, as you all know, has fallen out of bed. So in the last month or two the Krugerrand has reached an all-time high of just over R9,000," he said. In 1986, six million Krugerrands were minted, but that has come down to between 50 000-100 000 coins a year. "But, you know, when the proverbial hits the fan, everyone goes for what really counts, and that's Krugerrands. In fact, today there is a shortage of Krugerrands and the guys can't keep up with minting Krugerrands. So after all is said and done, Krugerrands are still the most popular coin." The exchange-traded fund market is not really a competitor for gold coins, Demby said. "I think we deal with the retail investor, or collector if you will, much like clients buy between, say, one and 2,000 coins. And I think the big institutional buyers really trade in the ETFs," he said. "I like to see that we work alongside each other, and I think that the institutional investors probably trade that market much more aggressively and more frequently than our clients do," he said. "Our clients tend to be on average long-term hoarders, if you will, for want of a better word, and at some stage they might wish to sell or hand it over to their children, grandchildren," he said. "There are over 55 million Krugerrands. It's really easy to buy and sell anywhere from one Krugerrand to a couple of thousand Krugerrands. It's really a very liquid market."