Are Gold Sovereigns A Good Investment?

Learn if quarter sovereigns are worth buying or not

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Ever heard of the gold sovereign? Many Millenials would find it hard to understand what gold sovereign is and connect it with investments because it has become very rare.

However, it will surprise you that it was a British gold coin used as legal tender many centuries ago. Investing in it today is worth every effort as its value has increased significantly.

Even though modern gold coins are still considered legal tender, they are rarely used in regular financial transactions because the metal value usually surpasses the face value. They are costly because they are uncommon. The same is true of sovereign gold.

Henry VII originally struck the popular English gold sovereign currency. In Britain, coinage was used again as currency from 1817 to 1917. Since 1957, it has been produced as a bullion coin and is incredibly well-liked outside Great Britain.

The sovereign was undoubtedly not England’s first gold currency. Gold coinage had already been in use for more than a century at that period. But at the time, it was the biggest and most expensive thing ever seen.

Seated and dressed in his coronation robe, Henry VII was depicted on the coin’s obverse. On the reverse were the royal arms, which included a magnificent double rose, signifying the union of York and Lancaster following the wars of the roses.

The only time gold coins were no longer used as a primary form of payment was early in the 20th century. By 1933, most of the world had stopped using gold coins as currency as nations had abandoned the gold standard due to hoarding amid the great depression economic crisis.

Although the use of the sovereign is no longer widespread, it remains a valid form of payment in the United Kingdom.

What Is The Worth Of Gold Sovereign?

It would be ideal if you considered the current live spot price for the specific size of the gold sovereign when determining its value. The bullion value of a gold sovereign, also referred to as its face value, is equal to its weight in gold.

The average coin weighs 7.98 grams. A sovereign gold coin is constructed of 91.67% pure gold and is produced in 22ct gold, meaning that 7.32 grams of pure gold are contained in every sovereign. The bullion value of your sovereign is found by multiplying the fine gold content by the spot price at that time.

Due to the numerical value of the gold sovereign coin at the time of circulation, it has a face value of £1. However, a Sovereign’s face value does not correspond to its true value. Uncirculated bullion coins are worth more than £1 because they are pure gold.

Your coin’s actual value may also depend on the following:

  • The year the coin was manufactured.
  • The division of the royal mint that made it.
  • How many coins were made at that mint that year?
  • The total number of coins from that year’s mint remains.
  • If the coin was a proof or a bullion coin.
  • The state of the coin.

Is A Gold Sovereign A Good Investment?

The sovereign is a solid investment, as evidenced by the thousands of British investors who buy it each year. In bullion coins, sovereigns are fairly distinctive in that they may be both an excellent investment and a priced collectible. The majority of other bullion coins date to the 1970s and after.

Although they still have collectible examples, they do not have the sovereign’s more than 200 years of heritage. In addition to the sovereign’s metal worth, its numismatic value can increase its collectability and make it a valuable investment.

All sovereigns have a purity of 916.7 or 916.7 parts of pure gold out of every 1000. Since the coin was reintroduced to Britain in 1817, the purity and weight of gold sovereign have been thus.

Why You Should Invest In Gold Sovereigns

Because they desire to hold the coins in their hands to cherish their age, beauty, weight, and craftsmanship, many numismatists adore collecting gold coins and sovereigns. Some purchase gold sovereigns to hold on to them for a long time, expecting the spot price to increase.

Investors, however, have various perspectives on gold sovereigns and are motivated to invest in them for many different reasons, some of which are highlighted below:

It is conceivable that the price of gold will continue to rise as the global population rises and gold mining declines. You can be confident that a gold sovereign will retain its value even if its price fluctuates, just like equities and shares.

However, as history has shown, the gold sovereign has always maintained its worth, even amid great financial upheavals in other markets.

Furthermore, it is easy to trade with. While gold sovereigns have a face value of just £1, each coin has a greater true value because it is made out of 0.235 troy ounces of gold. The small size of the sovereign makes them very popular compared to 1 oz coins, including the Britannia and Krugerrand.

Smaller amounts of gold sovereigns can be purchased and sold more easily, making them more affordable to investors, even more so than gold bars due to the simplicity of trading small amounts and the fact that they are much more accessible and affordable to obtain than gold bars.

Also, because they may purchase them tax-free, Investors enjoy trading gold sovereigns. Capital Gains Tax (CGT) is free for all British sovereigns and Britannia coins made after 1837 because, according to British Law, they are regarded as legal currency.

With its 200th anniversary in 2017, the gold sovereign remains the British Royal Mint Flagships coin, and investors and numismatists are passionate about its tradition and history.

If you ever experience financial hardship or require quick cash, a sovereign coin can serve as insurance. If you do not want to pay back the money, you could sell the sovereign to a reputable buyer or use them as an ideal object to pawn.

Additionally, the storage and maintenance of a sovereign are both simple and small. It is preferable not to clean the coin to avoid damaging its surface and lowering its value.

Every sovereign is made of 22-carat gold, weighs 7.98 grams, and has a thickness of 1.52 mm. These specifications, combined with the sovereign’s finely detailed designs, result in a coin that is particularly challenging to counterfeit.

Wherever it is shown, the gold sovereign is instantly recognizable and trusted. The sovereign bullion coin is the most liquid one available due to its extensive secondary market, unmatched by any other bullion coin.

It is easy for investors and collectors to pick from various choices available since the range includes half sovereign, larger and older sovereign, and others.

The sovereign also offers investors flexibility when selling their sovereign coins because of its various denominations. Owners of the sovereigns have the freedom to sell much as needed, as opposed to being limited to selling whole one-ounce coins.

Whichever motivates an individual to invest in the sovereign gold coin, purchasing it will enable you to acquire a renowned coin with a dependable and extensive global market.

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A Wide Variety To Choose From

Once you decide to invest in gold sovereigns, the next big decision is how much to invest and what type of coin to acquire. It is important as the sovereign is available in different forms. A very sensible and prudent strategy is to diversify your investment.

Your investment will largely depend on your circumstances, and you should only ever invest an amount you are comfortable with.

Find the descriptions and advantages of each form of gold sovereign below:

1. Older Sovereigns

Since they do not yet have a historical or scarcity value, current-year sovereigns are the cheapest to purchase. Because of these factors, older sovereigns like the pre-1604 are more expensive to purchase but have a higher value and may appreciate more quickly.

Due to their rarity and limited supply, gold sovereigns produced in 1604 or earlier are extremely sought after. They are more substantial and heavy than the current sovereign and are pure 23-carat gold. Their prices are independent of the gold market price and can fetch thousands of dollars.

2. Gold Proof Sovereigns

Before a coin entered mass production, proof-versions were created to access its quality and design. Mints manufactured gorgeous limited-editions proof coins exclusively for collectors as these, over time, became collectibles. These coins are double pressed to produce a higher-quality finish than usual.

It is regarded as a low-risk investment with good value growth potential. You can anticipate these coins to keep their worth and gain value because proof coins are uncommon and are made in smaller quantities with greater quality control.

3. Half And Quarter Sovereigns

Due to their long history and stellar reputation in the trading community, half-sovereign coins have a great historical appeal.

The half sovereign, which weighs half as much as the sovereign, is a more cost-effective investment. The half sovereign is as highly regarded as the full equivalent worldwide because it carries the same details.

Due to their affordable values, the half sovereign offers new investors a path into investing in coins and bullion. Due to the popularity of the half-sovereign, the Royal Mint expanded its offering in 2009 by including a quarter sovereign.

4. Rare Sovereigns

Several coins can be more valuable as collectibles than they are as precious metals. For instance, King George III’s 1819 Sovereign is one of the rarest coins, and it is estimated that there are just 10 coins in existence. Due to this, even if one coin is not in the ideal shape, it commands a high premium because of its rarity.

The second sovereign investors and collectors are looking for is the 1859 Victoria Ansell coin, of which less than 25 are known to exist around the globe. Chemist Ansell experimented with rejected sovereigns to create a stronger alloy that the Royal Mint could employ in manufacturing.

5. Current Gold Sovereigns

The new gold design has many obvious benefits. Price is very important when deciding to acquire more recent gold sovereigns.

Investors can score a deal by purchasing the new coins at lower prices because they do not command significant premiums based on rarity, age, or scarcity. There is a high demand for sovereigns, and due to this robust demand, the secondary market price is still rising.

As a result, good resale value can be anticipated in the future, and investors should invest in these coins to maximize their earnings.

6. Larger Sovereigns

The production expenses of smaller coins are higher. Smaller gold coins are more expensive to produce due to the cost associated with designing and cutting them. Therefore, larger coins are more accessible for less money per gram.

When a larger sovereign coin is purchased, there may be significant benefits. Lower production costs are advantageous for larger coins. The overall margin is increased by the expenses required to design and produce the same coin’s miniature replicas. You can get more gold content for a reduced price by buying the double or quintuple sovereign.

How To Invest In Gold Sovereigns

Many people flock to gold and jewelry shops in their thousands as it is the traditional way of making purchases, especially those who prefer to handle and view the gold they buy.

However, much of the gold trade has moved online. The advantage is that when buying investment-grade coins like the gold sovereign, one can easily find a reputed dealer online.

If the dealership has the necessary credentials, the sovereign will be authentic, in excellent condition, and sold at a reasonable price. Now that many have internet storefronts purchasing anything online is simple.

To be sure that your investment is legitimate, you may purchase sovereign gold bonds (SGB) valued in grams. These are alternatives to holding gold. Cash is used to pay the issue price, and when the b will be used to redeem them. Interestingly, investors are guaranteed the market price of gold at the time of maturity and periodic interest.

SGBs are offered for sale through authorized stock exchanges, Stock Holding Corporations, designated post offices, offices or branches of Nationalized Banks, Scheduled Private Banks, Scheduled Foreign Banks, and designated offices of private banks that provide online application services.

Once the application processes are completed and payments made and confirmed by the authorized agents, certificates of holding will be issued to the investor or client.

Watch if you would like to buy gold sovereigns:

Benefits Of Investing In Sovereign Gold Bonds

Since gold is one of the most priced commodities, returns on investment are always guaranteed. Even if the price of gold falls off the market, there could be a slight chance of capital loss. However, the amount of gold units the investor bought does not decrease in value.

SGB can also be transferred to a relative, friend, or anyone else who meets the eligibility requirements by signing the transfer document on file with the issuing agency, as this transfer will follow the Government Securities Act and Regulations.

For loans from banks, money firms, and non-banking financial companies, SGB can be used as collateral for loans.

SBG can be traded, sold, transferred, and exchanged on the stock exchange platforms according to Government regulations.

Conclusion

It is crystal clear that investing in gold sovereigns is a wise choice. However, finding a trustworthy dealer with a solid reputation and a good and robust customer base is advised.