The Gold Avenue Warns Krugerrand Sellers Against the 91.67 Percent Mistake

The Gold Avenue, the Illovo based buyer of gold, diamonds, luxury watches and Krugerrands, is drawing attention this October to a calculation error that it sees sellers make before they ever reach a buyer's desk. Many South Africans who hold Krugerrands work out what they think the gold is worth by taking 91.67 percent of the gold price. The figure looks sensible, because a Krugerrand is 22 carat gold. It is also wrong, and it leaves a seller expecting roughly 8 percent less than the gold inside a full ounce Krugerrand is actually worth.

The timing matters. Spring is under way in Gauteng, and The Gold Avenue's own experience is that selling is seasonal, with summer consistently busier than winter. As more people start to think about releasing value from Krugerrands bought years ago or passed down through a family, the company wants sellers to arrive with the right starting number rather than one they have talked themselves down to at home.

Where the mistake comes from

A Krugerrand is made from 22 carat gold, which is 91.67 percent gold and 8.33 percent copper. Sellers who see that percentage often assume that a one ounce Krugerrand therefore contains 91.67 percent of an ounce of gold, and they multiply the gold price by 0.9167 to reach its value.

The Krugerrand was designed the other way round. The fine gold content of a one ounce Krugerrand is a full troy ounce. The copper is added on top of that ounce rather than mixed into a fixed weight, which is why a one ounce Krugerrand weighs 33.930 grams gross rather than the 31.103 grams of a troy ounce. The holder is not sitting on 91.67 percent of an ounce of gold. They are holding a complete ounce of gold plus a small amount of copper.

The correct multiplier for a full ounce Krugerrand is therefore 1.0, not 0.9167. The same logic applies to the smaller sizes. A half ounce holds exactly half an ounce of fine gold, a quarter holds a quarter and a tenth holds a tenth.

Why a small percentage becomes a large gap

An error of roughly 8 percent sounds modest. On a single full ounce Krugerrand, at today's gold prices in rands, it is a meaningful amount of money. On a holding of several Krugerrands it grows quickly, and it can shape how a seller responds to every offer they receive.

The Gold Avenue's concern is not only that sellers underestimate. It is that a seller working from the wrong number has no reliable way of judging whether an offer is fair. Someone who believes their Krugerrand is worth less than it is may accept a figure that looks generous against their own sum but sits well below what the gold actually supports.

Checking a figure before any visit

The company encourages anyone planning to Sell Krugerrands to run a simple check on their phone before contacting any buyer, including The Gold Avenue itself. Only three inputs are needed:

First, the international gold price in US dollars per troy ounce. Second, the rand to dollar exchange rate on the day. Third, the size of the Krugerrand being sold, using 1 for a full ounce, 0.5 for a half, 0.25 for a quarter and 0.1 for a tenth.

Multiplying the gold price by the exchange rate gives the rand value of an ounce of gold. Multiplying that by the size gives the value of the gold content. That figure is a ceiling rather than an offer, and no dealer pays it in full, but it gives a seller a reference point against which any offer can be measured and discussed.

The company publishes a detailed explanation of how the Krugerrand price in rands is built, including the history of the gold price in rands since 1999 and why the value moves every trading day. It does not publish a fixed rand figure for a Krugerrand, because both the gold price and the rand change constantly and a number quoted on one day is not a number on the next.

What sits between the gold value and an offer

The Gold Avenue is open about the fact that no dealer pays the full gold content value. Its offers are anchored to what the trade will pay on that particular day, which is itself below the spot price. Gold can also move between the moment a dealer buys and the moment it sells, and that risk carries a cost. Verification, handling and compliance take time and money, and the business needs to make a margin.

What a seller should look for, the company says, is not the absence of a gap but a buyer who can explain it. A buyer who shows the day's gold price, the exchange rate, the size of the Krugerrand and how the figure follows from them is a buyer who can be assessed. A single number with no reasoning attached gives the seller nothing to test.

Fractional and proof Krugerrands

The ounce error is not the only way sellers lose out. The Gold Avenue regularly sees halves, quarters and tenths treated carelessly, either lumped together with full ounces or rounded against the seller. Each size should be priced on its own share of an ounce, and each is weighed and verified individually at The Gold Avenue.

Proof Krugerrands are a separate category. They have a mirror like finish, usually come in presentation packaging with a certificate, and are assessed differently from standard bullion Krugerrands. Sellers holding proofs are asked to mention them before an assessment begins. They are also asked not to clean or polish any Krugerrand, because polishing damages the surface and can only reduce what it is worth.

How a sale works at Illovo

Sellers can call, send a WhatsApp, email or book online, and walk-ins are welcome during business hours. A Purchasing Consultant weighs each Krugerrand in a private booth and verifies it on a Niton XRF analyser while the seller watches. The offer is explained before any decision, the valuation is free and there is no obligation to accept.

If the seller agrees, their details are captured on an iPad and they sign a one page Sale Agreement electronically. Payment is made by immediate EFT with immediate clearance across participating South African banks, or in cash subject to identification, compliance and the cash available on the premises. Larger cash amounts need a few business days' notice. A typical visit takes ten to fifteen minutes, and returning clients are often finished in under five.

Every purchase follows FICA, so sellers need a South African ID, passport or South African driver's licence and proof of banking details. Sellers outside Gauteng can arrange a secure courier, and home or office appraisals are available within the province. Anyone who needs money now but expects to want their Krugerrands back later can ask about a Buyback Agreement, under which The Gold Avenue buys the Krugerrands and the seller may repurchase them on an agreed date at a price set upfront.

A better informed season

The Gold Avenue has served more than 3,000 clients since it opened in April 2022 and holds a 5.0 rating on Google. Its view is that a seller who understands the gold content of what they hold is easier to deal with, more confident in their decision and more likely to return. Correcting the 91.67 percent assumption is one of the simplest ways to put sellers on an equal footing with any buyer before the busier months of the year arrive.

Learn more at https://thegoldavenue.co.za/

About The Gold Avenue

The Gold Avenue buys 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. It was founded in April 2022 by Founder and Managing Director Trent Saldsman. The company is a registered second hand goods dealer under the Second-Hand Goods Act, is registered with the National Credit Regulator and with the Financial Intelligence Centre, and is a member of the Second-Hand Dealers and Pawn Board and the Jewellery Council of South Africa. It works with an extensive local and international dealer network. The office is open Monday to Thursday from 08:00 to 17:00, Friday from 08:00 to 16:00, and on Saturday 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