Last Updated : 22 July 2009 at 16:00 IST
New law boosts gold bar sale in South Africa
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Following a change in the law, people in South Africa can now buy gold bars for the first time in almost a century.
South Africans were for a long time unable to share in the country’s gold wealth. The only possibility was to invest in gold companies or in Krugerrands, or to buy Mandela coins or jewellery.
Large fines or even imprisonment could be imposed on individuals who violated the law. As a result, South Africans could not hide gold under their pillows or in a safe for the lean years, a common practice in Europe and India.
After the promulgation of the new Precious Metals Act, South Africans no longer need to obtain a licence to hold unwrought gold. Such ownership was last permitted in 1911.
Jewellers immediately identified a market opportunity and have since June been offering for sale bars of gold, platinum and silver.
Gold bars are being sold at the gold spot price and the jewellers will add an 8% to 10% margin for their preparation.
The price of the bars is also directly linked to the value of gold and is not a perceived value, as in the case of coins.
A Mandela coin can cost a buyer R26,000, though the gold is worth only R6,500. Krugerrands sell for R8,000 to R13,000 each.
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