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The Gold Sovereign – The King Of Coins And Why You Should Buy It.

(Pic: The British Museum, Emma Traherne)

Key characteristics:

Diameter (Millimeters) 22.05
Weight (Grams) 7.988
Alloy (Carats) 22
Fineness (millesimal) 916.6
Actual Gold Content (Grams) 7.322
Actual Gold Content (Troy Ounces) 0.2354

Summary:

Gold coins vary tremendously in size, value, durability, purity, rarity, familiarity, ‘fakeability’ and desirability. The key test is how eager a pawnshop owner would be to buy one from you and how close to its retail value they would offer you for it.

The best coin under these criteria is the UK gold sovereign. Where to buy.

Why the sovereign is so great:

1. Size

The coin is small. It’s about the size of a current 2022 UK copper penny. It’s easily stacked and concealed. If you need to make a run for it,  it can be thrown in a bag of lesser coins and it won’t stand out. 

2. Value

This small coin currently retails in excess of £330 GBP.  People on a modest salary who save their cash can buy one a month easily. At the same time, a £330 small coin is a handy, portable investment.

3. Durability

There a small amount of copper in each coin. That makes them more durable. That said, you should avoid handling your coins. Collectors are fussy; faced with a choice of a pristine or a marked coin of the same value, they’ll always go for pristine.

4. Purity

Pure gold is 24k. The sovereign is 22k: 22 out of 24 parts are gold. The rest is copper.

Most jewellery you can buy over the counter is 9, 14 or 18k.

5. Rarity

Some years are more valuable than others. Some editions are more valuable than others. This makes collecting more interesting than buying ingots, which are just lumps of metal; a 1968 one is a valuable as a 2018 one.

6. Familiarity

Anyone who knows gold knows the sovereign. It’s like the American Eagle; people who don’t know much about gold will have heard of these coins. This means, an easy sale.

Some odd French coin will only appeal as bullion or to a specialist collector and then, they’re going to be more suspicious of it. Pawnbrokers want it less, because it will be harder to sell on. It may be entirely unknown to the kid behind the counter at the pawnshop when you rush in, desperate for fast cash.

As for gold jewellery: the stones are worthless, unless they are large, clear diamonds. Only the gold has value, and then only melt value, unless it’s fine or antique jewellery in good condition. And then the gold has to be tested with acid. The value is not easily definable, unlike the sovereign.

Many women who lusted after jewellery their husband sweated for get a terrible shock when they go to sell it and find out it’s worth half what he paid for it ten years ago.

7. Fakeability

The sovereign is faked quite a bit, but because simple, cheap sovereign scales exist, only a novice, or a dealer in a hurry, gets stuck with one.

You can also test them by dropping them on a hard surface; a fake one will sound different.

One ounce gold coins can be accurately faked by coating tungsten with the right amount of gold. Sovereigns are too small to do that.

Interestingly, there are fake sovereigns that are made close to the real thing, but the embossed details are off, as they are not struck from the original dies. Gold is cheaper abroad so it’s worth someone’s time to fake them.

So, worst case scenario, you’ve still got a piece of gold.

8. Desirability

Collectors want the sovereign.
Pawnbrokers want the sovereign.
Preppers want the sovereign.
Criminals want the sovereign! 

Tips:

– Buy proper coin holders

The cleaner and shinier the coin, the more valuable it can be. Wait five years and you’ve got a collectable coin, just because you bought it new, kept it safe from damage and they don’t make them any more.

Collectors will want a 2022 sovereign in 2030 just to complete a set.

– Keep receipts

We’re heading into tyranny in the West. There’s a good chance the government will try to outright steal your gold when the economy collapses and they start ‘reaching behind the sofa’ to prop up the regime.

One way for the government to grab your asset is to say you stole it. If you’ve got no paper proof, they’ll say it’s the proceeds of crime.

With receipts, that’s a harder lie to spin.