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Collecting Gold Sovereigns

If you know much about gold coins, you’ll undoubtedly have heard of the gold Sovereign. If you haven’t, then even better – because this coin is a great place to start if you’re new to buying gold coins. It’s the flagship coin of The Royal Mint and one of the world’s oldest gold coins.

The Sovereign is also one of the most recognised gold coins in the world. But even if you’re a seasoned coin collector, there may be some things about this remarkable coin that you didn’t know. Here’s everything you need to know about collecting gold Sovereigns.

The gold Sovereign coin through history

The gold Sovereign has weaved its way in and out of coin history since as far back as 1489. The first Gold Sovereign to appear in England did so some short years after the end of the Wars of the Roses, when King Henry VII commissioned its minting to celebrate and consolidate his new royal regime.

Commemorating a new monarch in coin was an act that had precedent as far back as King Alfred the Great – and King Henry had no intention of missing out. The original coin was minted from a half troy ounce of 23-carat gold.

Unfortunately the original coin didn’t last quite as long as King Henry would have liked. It outlived him and his children, but was eventually discontinued by the end of the Tudor era, after having been downgraded from 23 to 22-carat gold some years earlier.

It wasn’t until The Coinage Act of 1816 when the Sovereign made its comeback. The new gold coin was worth £1 and has been minted near-continuously to the same specifications, ever since. The new gold Sovereign, a somewhat smaller item than its predecessor, weighed 7.98805 grams and remained at the same 22 carat gold purity to which the earlier version had been downgraded.

The Sovereign remained a circulating currency coin throughout the Victorian era and into the 20th Century, when a move away from the gold standard eventually forced it out of use. Luckily, since 1957, it has continued to be released each year as a commemorative gold coin by the Royal Mint.

Why you should collect gold coins

There are many reasons why people choose to collect gold coins. Of these, the two prevailing reasons are to collect and to invest.

Investing in gold coins, as opposed to gold bars or ingots, has many benefits to both precious metal investors and coin collectors alike. Gold bars are convenient because they are simple, unadulterated contingents of gold, with no bells and whistles. A coin on the other hand, has a certain premium value to it – their history and tradition means they’ll likely rise in value over the coming years and decades.

To the savvy investor, therefore, a gold coin can often be considered the superior investment, since it has the potential to offer far greater long-term returns than simply that of its equivalent spot price gold value.

To collectors, the historic tradition of gold coins is of particular importance. There’s nothing quite like holding a piece of history in your hand – and, where history is concerned at least – the Sovereign is unrivalled.

Why you should start collecting gold Sovereigns

Collecting gold Sovereigns comes with a range of benefits that other international gold coins, like perhaps the South African Krugerrand, or the American Gold Eagle, cannot rival.

The first and most obvious of these benefits is that, despite its long history and tradition, the gold Sovereign is actually significantly cheaper than most other recognised gold coins. It still follows the coin specifications that the 1816 Coinage Act established, and is therefore much smaller and lighter than the larger, modern coins, which largely compete to offer a troy ounce of 24-carat gold in coin. For this reason, the gold content is much lower, and the coin itself accordingly cheaper.

It’s therefore a fantastic coin for first time gold investors; it allows them to enter the gold market on a smaller scale than other alternatives. The Royal Mint’s other well-known gold series, for instance, the gold Britannia, is noticeably larger and more expensive; 32.69mm in diameter and a troy ounce of fine gold.

As well as this, the gold Sovereign has certain tax benefits, making it cheaper than even equivalently-sized gold coins of another country could be. As well as being free from VAT, like all investment gold, it is also considered legal tender British currency.

Like all legal tender coins in this country, it is therefore also free from Capital Gains Tax (CGT). That could certainly save you a significant sum some years down the line if you had to sell a large collection of Sovereigns.

Maintenance and security when collecting gold Sovereigns

If you’ve put a lot of time and money into collecting gold Sovereigns, the last thing you’re going to want is to allow their value to be compromised by damage or theft. It’s important to make sure you store them with care.

Those who take care of their gold at home often choose to do so in a safe. If you’re determined to have these beautiful coins on show it may be worth considering buying a display case so you can admire your collection at any time, without compromising on security.

Many people choose not to store the gold coins at home at all, either keeping them safely in a safe deposit box with your bank, or simply storing the product with the gold merchant themselves. At The Gold Bullion Company, we’ll happily secure your coin collection on your behalf, so you won’t have to worry about safe deposit boxes, damage or theft.

If you want to find out more about our gold protection scheme, then get in touch with us today. Alternatively, browse our vast collection of gold Sovereigns to discover more about these beautiful coins.