Gold Sovereigns have been around for more than two centuries and have an important place in any investor’s portfolio. Gold Sovereigns enjoy tremendous liquidity, as it is one of the best-known British coins in the world. Many collectors and investors are keen to invest in this coin. There are also many different years of issue associated with the Sovereign, at different price points. Older Sovereigns may command more value due to their rarity. However, newer Sovereigns are easily available at low premiums. The decision to invest in gold Sovereigns need to be based on certain factors.
Divisibility and balance
Sovereigns are available as a bullion coin, but a unique quality is their gold content. Most bullion coins typically weigh an ounce. However, Gold Sovereigns weigh a quarter of an ounce. Therefore, investors can explore a wonderful opportunity to build a portfolio with a variety of coins. Buying Sovereigns of different denominations can enhance the divisibility of your portfolio. This simply means that you have greater flexibility when selling. This is a better option than selling a 1-ounce bullion coin at a certain price point in the market. Owning Sovereigns of different dimensions and different years of issue can also help create a balance for your portfolio.
Queen Victoria Young Head Sovereign
Better affordability
The Sovereign is a more affordable coin due to its smaller size. As an investor, the coin allows you access to the gold market with a lower investment. As a mass-produced coin, Sovereigns are a lot cheaper when compared to the Gold Britannia. Therefore, a great investment strategy is to buy Gold Sovereigns every month. Sovereign bullion coins, present an opportunity to acquire gold at a cheaper price per gram, due to their lower manufacturing costs.
A rare King George IV Sovereign depicted with Roman laurels
Creating variety for your portfolio
So far, we have covered some important points that will help you select the right gold Sovereign. We have established that gold bullion coins are better for investment. Since the Sovereign is available in smaller denominations, we have also discussed that having a variety of sizes can create an advantage for your gold portfolio.
When buying a Sovereign bullion coin, always look for the current year of issue. These are available in plentiful, at rock bottom prices and low premiums. Apart from new coins, what else should you look for? Gold Sovereigns enjoy a strong supply pipeline and many modern Sovereigns from the past 10 years are easily available. You may be able to obtain some of these coins at better prices than the new ones. Spreading your investment over a variety of modern Sovereigns can be a sensible approach towards creating variety for your portfolio and making it stronger.
Buying old Sovereigns
The best old Sovereign to buy based on price is the current year of issue. Sovereign prices are based more on gold content. If seeking a combination of value and history, the George V and Elizabeth II coins provide the optimum all-round solution. If buying many Sovereigns, a combination with older Victoria coins is best.
The Sovereigns from the reign of King George V are still available at affordable prices, due to their availability. However, these coins do offer enough numismatic value and interest, making them worth collecting. Edward VII Sovereigns are more expensive to buy but worth acquiring if you can get a good deal on them. Queen Victoria have three different Sovereigns that were issued during her reign. These are called the Young Head, Jubilee Head and the Old Head. These are the most expensive coins among the modern Sovereigns, but investing in them can fetch good returns, as their value continues to rise due to rarity.
Our gold experts can advise you on the right Sovereigns to buy
Physical Gold is one of the most reputed gold dealers in the UK. We have a team of gold experts who can help you purchase the best Sovereigns for your investment portfolio. Call us today on (020) 7060 9992, or get in touch online through our website.
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Gold Sovereign (Victoria – Present)
Country: Great Britain
Face Value: £1GBP
Gold Content: 0.2354 ounce (7.3224g) – Alloyed with copper, or copper and silver
Purity: 917/1000 (22 karat)
Gross Weight: 7.9881g
Coin Diameter: 22.05mm
First year of issue: Modern Sovereign 1837
The Gold Sovereign coin was first issued in 1489 for Henry VII of England and is still in production today. Sovereign coins are arguably the most famous of all gold coins and should form a part of every gold portfolio. They are desirable to investors and collectors alike. Due to their long history of production Gold Sovereign coins are split into several types, each with their own pricing and nuances. Modern coins will be of the last 10-15 years and probably still be in their plastic blister pack. Older coins, particularly dated pre-1933 tend to exchange hands either loose or in rolls of 50. Physical Gold offers an easy way to buy and sell sovereign coins.
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These British coins typically have a face value of £1 sterling or 20 shillings. When it was first released it was primarily an official piece of bullion with no mark of value on the actual coin itself. The coins were 23 karat gold and weighed 15.552 g, Henry VIII reduced the purity to 22 karats with a weight of 7.322 g.
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The core Full Sovereign coin has spawned several other Gold Sovereigns of varying sizes. These include the 2 Pound coin (or double Sovereign), the Five Pound Coin (you guessed it – a quintuple Sovereign, making it the largest gold content of any British coin), the Half Sovereign and the Quarter Sovereign. Generally, you’ll pay more per/oz for the smaller fractional coins than the full Sovereign or larger coins.
Sovereign coin production ceased in 1604, being replaced by Unites, and later by Laurels, and then Guineas. In 1817 production of Gold Sovereign coins restarted.
Modern Sovereigns are those minted during the reign of Victoria, Edward VII, George V, George VI And Elizabeth II. These Sovereigns feature the monarch who reigned during their production on the obverse side.
The reverse most commonly features Saint George slaying a dragon which was designed by Italian engraver Benedetto Pistrucci. A number of different shields have also featured on the reverse and often attract a higher price tag.
As a coin of the realm in the UK, buying gold sovereigns benefits from being free from Capital Gains Tax for UK residents. You can buy gold sovereign using any of the order, delivery and storage options throughout the Physical Gold website
Sovereign Coins
Alongside the Union Jack, bulldog and red telephone box, the gold sovereign coin is one of the most iconic British symbols, providing the basis of timeless gold investment as well as a treasured lifelong possession.
Another reason for their popularity amongst collectors is their worth. A fantastic way to preserve value against inflation, gold sovereign coins hold their value particularly well over time and provide an excellent all-round investment. This also makes them a popular starting point for those thinking of investing in gold.
Some choose to buy gold sovereigns from recent years, others from hundreds of years ago meaning that the value of gold sovereign coins can be hard to determine. At Physical Gold we are experts in buying and selling sovereign coins and can precisely value new and old coins.
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Gold Sovereign Coins
Those looking to sell sovereign coins often cite their flexibility as one of the motives behind their decision, allowing them to keep their investment in smaller units. Whether to sell or buy gold sovereigns, the consistency of the production quality is often still hailed as one of the finest in the world.
Gold sovereigns are made with 22-carat gold. This consists of 11 parts crown gold out of 12 and one-part copper out of 12. This composition has not changed since the issue of the 1817 sovereigns. This particular composition of the alloy used in making the sovereigns ensures the coin is more durable and protects it against scratches and dents.
With opportunity, lies danger
Gold sovereigns enjoy high demand from numismatists around the world. Due to its great demand, the coin commands a much higher price than its weight in gold. Unfortunately, this has also led to some instances of counterfeit coins appearing in the market. When buying a gold sovereign, it is therefore important to ascertain whether the coin is genuine. Gold coin dealers or brokers use a coin gauge to detect fakes, as well as checking measurements and weight. In one instance, a few fake 9-carat gold sovereigns had started circulating in the market. However, an experienced coin dealer will spot the counterfeit coin immediately due to its discrepancy in weight and thickness. Gold itself is a difficult metal to counterfeit, owing to the density and colour of the metal. Fake gold sovereigns are usually underweight or have the wrong dimensions. Today, the gold sovereign is a protected coin and enjoys protection from the UK government through the forgery and counterfeiting act 1981.
Buy Gold Sovereigns
If you wish to buy gold sovereigns, ensure you purchase from a reputable dealer to ensure the lowest price. If you are looking to sell sovereign coins Physical Gold can make the process easier. As proud members of the British Numismatic Trade Association (BNTA) Physical Gold is committed to dealing coins in a legal and efficient way. In addition to this Physical Gold is a member of the National Association of Pension Funds making it possible to buy and sell gold coins as part of a wider long term investment plan.
Why buy gold coins?
Genuine gold coins can be a fantastic investment, a treasured heirloom to hand down through the family or an opportunity to protect your wealth for the future. Many people have already heard about these advantages, and more besides, but how do you take the next step to own gold? It’s unlikely that you have a ‘gold coin shop’ at the bottom of your road and, as we’ll discuss below, even if you did it might not be a good idea to buy from there! So, how exactly do you buy gold coins?
The advantages of gold coins
Gold is, first and foremost, a great way to protect your wealth. It’s not linked to stock market prices and so, in times of recession and market crashes, gold will often hold its value & provide a safe haven. This is because Gold is universally recognised as having an intrinsic value, so there’ll always be demand for it, which isn’t always the case with Company stocks and shares.
Coins, in particular, are considered to be a very liquid asset because they’re
smaller, they’re easily divisible. This means that if you required a relatively small amount of cash, you could easily sell a small portion of your holding.
In this way, the appeal of gold coins is enhanced by the fact that some dealers will even offer a buy-back guarantee for these coins due to their liquidity, typically at a higher price for their weight than bars.
As well as the opportunities for selling your coins in the future, there are also immediate purchase advantages. Coins are often available at a lower premium and are extremely tax efficient. This is because UK gold coins are technically legal tender within the UK, so there’s no VAT to pay and no Capital Gains Tax at the point of sale.
The different types of coin
There are many different types of gold coins on the market, but one of the most common UK coins, which benefits from the tax advantages mentioned, is the British Britannia. Like other well recognised gold bullion coins, it’s one ounce in weight and is a sound investment choice, whether you’re just starting or an experienced investor.
You can see a more comprehensive list of your bullion coin options here, including the South African Krugerrand, which is another common option for investors who want to diversify and move away from solely investing in UK coins.
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It’s sensible to buy coins that can be sold easily
A vibrant secondary market is an absolute must when it comes to purchasing coins. This is simply because you will want to sell them at some point in time in order to realise your investment, along with a tidy profit. But, far too many investors buy obscure gold coins because they think it’s rare and has a numismatic value. When they try to sell it, they can’t find a buyer. So, it’s imperative to invest in coins that can add liquidity to your portfolio.
Royal Mint gold coins
These could be well-known gold coins like the Britannia or the Sovereign. Both these coins enjoy a reputation that stretches far and wide across the world and can be sold quickly at any place, any time. It’s also important to note that these coins are easily available and can be purchased in large quantities with bulk discounts. The Britannia, for example, does not command a rarity value as its editions are all fairly recent and do not go back centuries. They are mass-produced and are easily available with low premiums.
Gold coins can add divisibility to your portfolio
Buy gold coins for collection purposes
Investing in old, collectable gold coins (also known as numismatic coins) is a popular hobby for many, and collectors can make decent profits at any point, should they decide to liquidate their collection.
However, numismatics (rare, gold-bullion coins which are not quite at the point of being formal collectables) is a professional discipline of study, and for the casual or even professional gold investor, it’s normally recommended that you stay with modern gold coins.
If you do have a specific interest in numismatic or semi-numismatic coins, however, it is possible to purchase these via the same routes as those described below.
Is it possible to combine a passion for collecting with profits?
Several investors develop a passion for collecting over time. If you are developing a collection, it doesn’t necessarily mean that you should forego profits altogether. There are several collectable sets of coins available in the market that are attractive to investors as well, as collectors. A case in point would be the Queens Beast series of coins, which are released by the Royal Mint.
The set features the legendary Queens Beasts and two new releases are introduced into the market every year. The challenge of collecting the entire set lures several collectors. At the same time, these coins are an excellent investment, as values can go up by as much as 40% in one year. Therefore, they tick both boxes for the buyer – collectability and good profits.
How to buy gold coins in the UK
Once you’ve reviewed the information about gold coins and decided on your approximate purchase requirements, you have several options for the actual purchase itself. The main routes to buy gold coins in the UK are:
- a registered and approved gold dealer
- a jeweller
- an online private seller (using a marketplace such as eBay)
- an online portal seller
Each of these options can have their own strengths and weaknesses.
Registered and approved gold dealer
An approved gold dealer will typically be able to provide you with the best price, the best quality and the best choice of gold coins, due to their position at the heart of the gold marketplace and their associated buying power.
They offer added security with regard to quality, flexibility in the quantity you wish to buy and expertise when it comes to guiding you on which type of coin to purchase. Gold can be purchased for many reasons and a reputable gold dealer will be able to guide you on which type of gold coin will best meet your objectives. They should also have added services such as insured storage of your gold coins – should you prefer not to store them yourself. A reputable dealer should be BNTA accredited. The BNTA oversee the coin trade within the UK and dealers must meet certain criteria before they are awarded accreditation.
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It’s important to discuss your investment objectives with your dealer at your first meeting or call. Once you can secure a place on the dealer’s mailing list, you will get to know about the best deals in advance. If a specific coin that you’re interested in becomes available, you’ll be the first to know. A clever way to purchase gold coins at lower prices is to wait until the market becomes quieter. Needless to say, there could be excessive demand in a busy market and prices would stay up.
Jewellers
Some jewellers will often hold small quantities of gold coins, sometimes with the intention of selling, as they would a ring or necklace.
The coins held at professional & reputable jewellers are likely to be genuine but may not be of the trading quality sold by a gold dealer. They’re also likely to hold a limited quantity and may possibly charge a larger margin, due to the likely intention that the gold is a gift, rather than an investment. Not a bad option if you want to buy gold coins in small quantities.
Private sellers
Gold collectors, and owners, can sometimes turn to marketplaces such as eBay to sell their gold to the mass market.
Whilst it can be tempting to sniff out a bargain on sites such as this, purchases from private sellers come with risks such as being fake, or low-to-middling quality and there is a lack of purchase guidance that you would receive from a reputable dealer.
Online portals
Some bulk sellers now offer automated online portals for gold purchases. This can be an attractive proposition for smaller purchases of perhaps one or two coins.
For larger purchases, however, these portals are usually unable to offer personalised guidance on your chosen gold, which can make all the difference to your returns and the value of your gold holding at a later point.
How to structure your gold coin purchase
Once purchased, you may decide that you wish to keep your coins at your home. If this is this case, we would recommend installing a security solution such as a safe. Alternatively, if purchased from a reputable gold dealer they will probably be able to offer you a secure storage solution.
There are also other options for your gold purchase, which may align with your wider investment objectives. A regular savings plan might be attractive – reducing your initial outlay and helping you save in smaller, manageable contributions to your overall gold coin holding. A gold dealer can discuss the options with you and help decide on the most suitable route forward.
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Getting value for money from your purchase
The ‘secret’ to buy gold coins successfully is simply to understand why you are buying gold and to make a purchase based on your long-term aims.
The reasons for someone in their 50s purchasing a single gold coin to pass to their grandchildren, for example, will be very different from the reasons behind a 30-year-old purchasing to hedge their existing investments.
In each of the above scenarios, experts are there to help ensure your purchase is exactly right for you – furthering your overall aims and benefiting you and your circumstances.
Investing in gold coins can be highly tax efficient
Making tax-efficient investments
Tax efficiency is a key consideration for any investor. UK investors are fortunate to have VAT and CGT savings on UK gold coins. There are VAT exemptions on all investment-grade gold, which includes coins and bars (such as 1oz, 100g and 1 kilo). However, gold coins that are legal tender in the UK are also capital gains tax-free. This means any profits that you make from the sale of your investments in the UK gold Britannia or Sovereign will not be subject to capital gains tax. But, if you were to invest in a non-UK gold coin like the Krugerrand, the profits from its sale can be taxed.
Call Physical Gold for the best advice on buying gold coins
Physical Gold is one of the most reputed online dealers of precious metals such as gold and silver (bars and coins) in the UK. We have investment advisors who can guide you on the best gold coins you can buy. Our team makes recommendations and imparts advice after discussing your investment objectives. Give us a call today on (020) 7060 9992 or contact us through our website. We can help you build a robust portfolio by investing in the right gold coins.
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The sovereign is an iconic British coin that is popular amongst investors and collectors. The modern sovereign has been in existence since 1817, and the coin has witnessed the reigns of several British monarchs.
Over the years we are regularly asked questions about sovereign gold coins. So, we decided to provide these handy FAQs with answers, which hopefully will provide you with all the answers you will need!
1) Is it best to buy old or new Sovereigns?
Please read our dedicated answer to this question at https://www.physicalgold.com/insights/is-it-best-to-buy-old-or-new-sovereigns/.
New sovereigns like the 2018 gold sovereign are a great investment
2) What are gold Sovereign bonds (SGB)?
SGBs are an alternative to holding physical gold. Paper bonds denominated in gold grams are issued by The Reserve Bank of India and offer a fixed maturity date whereby the investor receives back an amount based on the underlying gold price.
3) What are gold Sovereign coins?
We have written a detailed answer to this question. Please visit https://www.physicalgold.com/insights/what-are-gold-sovereign-coins/ for a detailed explanation.
4) How much are gold Sovereign coins worth?
We have provided a separate answer to this question, which can be viewed at https://www.physicalgold.com/insights/how-much-are-gold-sovereign-coins-worth/.
5) How heavy is a gold sovereign?
The total weight of a gold Sovereign is 7.98 grams or 0.2566 ounces. However, the gold content of the coin is only 7.32g, with the remainder consisting of copper and silver alloys to toughen the coin. Care should be taken not to mistake the Full Sovereign with the smaller Half Sovereign which weighs 3.99g.
6) How to clean gold Sovereigns?
The best way to clean dirty gold Sovereign coins is in a mix of warm water and liquid soap. Let the coins soak for 15 minutes before carefully wiping dry with a cloth. Boiling water from a kettle can be added into the bowl for stubborn grime. Avoid using a brush or strong chemicals.
7) How to sell gold Sovereign coins
For our detailed reply to this question, visit https://www.physicalgold.com/insights/how-to-sell-gold-sovereign-coins/.
8) How much are gold Sovereign rings worth?
The main value will come from the Sovereign itself. If the coin is in good condition and features a previous monarch, it will be worth more than an Elizabeth Head coin. The value of the coin itself is £200 – £300 depending on age and condition. The ring is likely to be lower purity so will only add a marginal value of 10-15%.
9) Why buy gold Sovereigns?
Visit https://www.physicalgold.com/insights/why-buy-gold-sovereigns to read a detailed answer to this question about buying gold sovereigns.
10) What is a gold Sovereign worth in Sterling?
The value will depend on its condition and age. Brand new coins are worth around £240 each while Young Head Victoria coins are worth over £300 due to their age and rarity. Selling privately on an individual basis may yield higher prices if you can find a keen buyer. If selling in bulk, a gold dealer is best.
11) What carat is a gold Sovereign?
Gold Sovereigns are 22 carat purity, the same they’ve been for over 200 years. This works out around 916/1000 parts gold. The other two carats are a mix of copper and silver alloy. The exact mix can vary from year to year. This alloy mix ensures the coins are more resilient to scratched than 24 carat coins.
12) Which gold Sovereign coin is the most valuable?
Click https://www.physicalgold.com/insights/which-gold-sovereign-coin-is-the-most-valuable-2 for a detailed answer to this topic.
13) Which gold Sovereign should investors buy?
We have answered this question through a separate blog article, access this by clicking https://www.physicalgold.com/insights/which-gold-sovereign-should-investors-buy.
14) Where can owners sell gold Sovereign coins?
The best overall place to sell gold Sovereigns is to a specialist gold dealer who will pay you based on the sell-on value rather than just a melt value. A BNTA accredited dealer is a must if you consider trust to be a selling consideration. Selling privately is an option for rarer Sovereigns as collectors may pay a premium.
15) How do I found out where to buy gold Sovereign coins?
Click https://www.physicalgold.com/insights/how-do-i-find-out-where-to-buy-gold-sovereign-coins for a comprehensive answer to this question.
Gold sovereigns can be bought in proof sets, these are published each year
16) Can you melt gold Sovereigns?
Under the 1971 UK Coinage Act, it’s illegal to melt down any UK coin with a face value. Which covers Sovereigns. More importantly, melting a Sovereign will devalue the gold, which is worth more minted as a Sovereign due to its tax efficiency as legal tender and recognisable trading format.
17) Can you spend a gold Sovereign?
Yes! Gold Sovereigns have a face value of £1, which means shopkeepers would have to accept it as legal tender. But with the gold content alone, pushing the value above £200, it would be foolish to use a Sovereign to buy goods.
18) One gold Sovereign is how many grams?
The total weight of a newly minted Sovereign is 7.98 grams. The old content itself weighs 7.32g, with the remainder consisting of a copper and silver alloy. Coins may weigh slightly less as they become older and wear on the face and edges.
19) Is a gold Sovereign legal tender?
Click https://www.physicalgold.com/insights/is-a-gold-sovereign-legal-tender to read a separate article, which answers this question.
You could spend a gold sovereign if you wanted to, but with a value of only £1 it would be unwise
20) Gold Sovereigns or Britannias – which are the best to buy?
Read our comprehensive article about gold sovereigns and gold britannias to this question at – https://www.physicalgold.com/insights/gold-sovereigns-or-britannias-which-are-the-best-to-buy.
21) Gold Sovereigns or Krugerrands – which are the best to buy?
Read our detailed article here – https://www.physicalgold.com/insights/gold-sovereigns-or-krugerrands-which-are-the-best-to-buy, which answers this question.
22) How much gold is there in a gold Sovereign vs a Half Sovereign?
Click https://www.physicalgold.com/insights/how-much-gold-is-there-in-a-gold-sovereign-vs-a-half-sovereign for a detailed answer to this topic.
23) What is the difference between a sovereign and a half sovereign?
We have provided a detailed response to this question at this link – https://www.physicalgold.com/insights/what-is-the-difference-between-a-gold-sovereign-and-a-half-sovereign/.
Talk to our experts before buying or selling gold sovereign coins
We always love to hear from customers, new and old and are always here to answer questions about all precious metal topics including ones about gold sovereign coins. Why not call Physical Gold Limited now on 020 7060 9992 or complete our contact form. We look forward to hearing from you soon!
Gold Sovereigns have been in circulation for over two centuries, making it one of the most popular iconic British coins with a large secondary market. The Royal Mint struck these coins, using 22-carat gold from the year 1817. They have now been put out of circulation and are available as a bullion investment coin. The iconic design of St George and the Dragon, created by Benedetto Pistrucci make these coins unmistakable and they are in great demand from numismatists and investors alike.
Gold sovereigns can carry hefty premiums depending on the monarch and the year. For example, the Young Head Victoria can fetch prices of around £300. There are even rarer ones like a proof set created for Edward VIII. A single coin from this set can command a price of £516,000. So, investors need to know how to sell these coins in order to maximise their profits.
Selling a gold Sovereign can be very lucrative
Identifying a reputed online dealer
Since the Sovereign carries a numismatic value as well, as its value in gold, it’s best to sell your Sovereign gold coins to a reputable gold dealer. This will ensure you receive a fair price that reflects the gold content and the numismatic value of the coin. Members of the British Numismatic Trade Association (BNTA) are trustworthy. Going through a reputed dealer can get you access to a wider secondary market, increasing the chances of a quick sale at a good price. Preparing to sell is a key factor. If you want the best possible price, let the dealer know in advance that you want to sell your Sovereign coins. It’s important to let your dealer know about the complete details of all the coins you want to sell. You must decide on a timeline for the sale. This will help your dealer identify the right buyer and bring the coins into the market at a time when the best price can be achieved. Don’t be in a hurry to sell, unless you need the funds for an emergency. A distress sale is always likely to get you a far lower price.
Click here to download the FREE 10 Commandments when selling gold coins
Attempting a private sale
Some investors believe that they can get a far better price by arranging a private sale. But, be aware that it may not be possible for you to check the backgrounds of the buyers. It could be risky to have them visit your home. As an individual investor, it is unlikely that you will have a large network of interested buyers. So, you will be forced to depend upon only a few interested buyers who may have responded to your ad. Of course, it may also take a lot of time and effort to post your ads and reach out to the right audiences. A dealer would be far more adept at reaching out to interested parties.
Research your dealer well
You aren’t forced to sell through one dealer only. If you identify two or three reputed dealers, feel free to engage all of them. Doing your research means connecting with other investors and buyers in the marketplace. Find out all about a dealer’s reputation and background by speaking to other investors and viewing their ratings online.
Contact Physical Gold for the best way to sell your gold Sovereign
An effective way to properly market your gold Sovereign is to simply speak with our investment team. Physical Gold Limited is registered with the BNTA and have a long track record in providing exemplary service. Getting in touch with our team is easy. Simply call (020) 7060 9992 or visit our website to reach out to us.
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One of the most common questions I hear is from keen investors wanting to know the best gold coins to buy as an investment.
The most important thing people seem to overlook is the ease in which you’ll be able to sell the coins. It sounds obvious, but so many buyers focus purely on trying to get as much gold for their money when they invest that they forget to consider the liquidity of the gold.
Liquidity makes the best gold coins
Remember that your profit is only realised on physical gold when you actually sell the coins at a profit. So when buying coins your primary focus must be on choosing well-known coins in desirable condition. So please don’t be tempted by an obscure coin just because its £10 cheaper than its globally renowned alternative. With this in mind, any of the well-known bullion coins are a safe bet. These could be Sovereigns, Britannias, Krugerrands, Eagles, etc. You can find a comprehensive list with thorough descriptions at Bullion coins.
A novice should never try to be too smart by delving into the world of numismatic or historical coins. These generally present high potential profit, but also large losses for those without market experience. Proof coins should generally be avoided by the gold investor as you won’t necessarily get the full premium back that they command.
Sovereign coins
For very modest investors it can be fun to select a variety of bullion coins for your portfolio, perhaps choosing some Sovereign coins with an interesting background or coins with beautiful designs.
Queen’s Beasts coins
For those seeking a chance to turbo charge their returns and willing to take a modest increase in risk, the Royal Mint’s Queen’s Beasts series of coins can be a clever option.
This is a series of 11 one ounce 24 carat gold coins (also produced in silver and fractional versions), which are limited in issuance. In contrast to the Britannia or Sovereign bullion coins which are unlimited and mass produced, the Queen’s Beasts coins have been released coin by coin, every 6 months. Once a particular version is all sold, they’re not produced any more.
This relative scarcity, combined with a degree of collectability, has pushed up premiums on these coins far quicker than standard bullion coins.
While the first 8 coins in the series already command high prices, the most recent 2-3 coins are still being produced, albeit not for long. Therefore, premiums on the most recent releases are still only slightly higher than the standard Britannia. While there’s no guarantee that their prices will mirror the earlier coins in the series, there’s a good chance.
Tax efficiency
However, for those UK investors considering a more sizeable investment you must consider factors such as tax. Capital Gains tax was recently increased for higher rate tax payers in the UK to 28%. That means that if you sell your gold coins at a profit exceeding your annual limit (currently around £12k) then you’ll pay away almost a third of that excess to the taxman. Any other assets you sell in that year will use up that £12k limit too. So if you sell shares or an investment property and make a profit, you’ll no doubt be paying CGT on all your gold profit!
Download our FREE 7 step cheat sheet to successful gold investment here
The great news is that with some careful planning and help from a reputable gold dealer, you can source tax free gold coins. Britannia, Sovereign and Queen’s Beasts coins are all free from Capital gains Tax for UK residents due to their status as legal tender. Quite simply the taxman cannot tax the movement of legal currency. For this reason, together with the fact that these two coins are amongst the world’s best known, most UK investors are best off investing into these tax free gold coins.
The most important rule with gold coin investing is that everyone’s situation, needs and motivations for buying differ, and so the best gold coins to buy may also vary. This is where the real value of a knowledgeable gold dealer pays dividends!
Economic instability
With central banks around the world still printing QE money going into 2022 to support their Covid-affected economies, the value of fiat currency is diminishing. Signs of inflation, possible interest rate increases and tax hikes, suggest to many experts that a global recession, the size of which we’ve never known, is upon us.
It’s no surprise then, that investors are increasingly turning to gold to provide some diversification and protection from the coming economic storm. But if most people are asked which gold coins to buy, they will be stumped.
The Krugerrand coin is one of those coins which most people, even my grandmother, have heard of and this is for good reason. For many, it represents one of the best choices of gold in which to invest your hard-earned money.
A South African coin first minted in 1967, the intention was to lure global investment into
buying gold coins from South Africa’s rich gold reserves. Up until recently the Republic was the number one producer of gold and has only just been overtaken by the Chinese powerhouse.
To appeal to the investment market it was the first coin to contain exactly 1oz of pure gold, ensuring a straightforward marketing proposition compared to the likes of a Sovereign which contains 0.2354oz. Interestingly this fixed gold weight rather than a fixed face value (like most other bullion coins) meant that the Krugerrand coin represented a convenient store of wealth regardless of inflationary levels.
Krugerrand coin most common globally
Despite no face value, the coin is legal tender in its home country and is therefore minted in a durable alloy mix. Its overall gold content is 22carat or 91.67% pure as the gold is alloyed with copper to provide resilience and maintain its integrity. This is one of its major selling points now. With approximately 50 million in circulation, it represents one of the most active secondary markets in gold coins and a vast majority of the Krugerrands we see of 30 or 40 years old are still in fantastic condition.
Indeed due to the huge number in circulation and its global recognition, the depth of the Krugerrand’s liquidity is only matched by that of the British Sovereign, a coin that has built up its liquidity over many more years. There are more Krugerrands in circulation than all the other gold bullion coins combined. As an investment into a physical asset, this is very important. Just like when buying and selling a house, it is not only the price you manage to purchase the property at but also the sale price which will determine your profit. If you buy a house for a great price but it’s on the main road and appeals to a very niche market, then it is more difficult to sell and the eventual sale price will inevitably be affected. The same goes for gold. Buy a Krugerrand and you’ll be able to sell the coin easily at any time, maximising your chances of securing a good price.
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Incredibly by 1980, the Krugerrand coin accounted for 90% of the gold coin market. It’s a telling recognition of its success that it has spawned so many other copycats worldwide including the Canadian Mapleleaf in 1979, the Australian Nugget in 1981, the American Eagle in 1986 and the UK Britannia in 1987.
So the Krugerrand is a very liquid coin, easy to buy and sell and it maintains its condition well. But how does it’s price compare to other 1oz bullion coins? From what we see at Physical Gold Ltd, the Krugerrand offers amongst the best value of ANY 1oz gold coin. Due to its resilience to scratches, I’d recommend buying second-hand coins rather than the most recently minted. Like a new car’s premium, it’s almost always better value to buy a ‘nearly new’ version. Brand new Krugerrands can be 3-5% more expensive. I’d also try to steer clear of the smaller half, quarter and 1/10th ounce versions as premiums rise with each smaller coin. I’d also avoid Proof versions of the coin. Although pretty, I’m not convinced you’ll receive the same premium that you paid for the coin when you come to sell. Your best bet is to stick with the better value bullion version.
The only potential drawback I see for UK investors as that of Capital Gains Tax. Like a majority of other assets, any profits on Krugerrands have to be declared and are liable for tax of up to 28% if you breach the modest thresholds. Now, this may not be an issue if you only buy a handful of Krugerrands, have no other assets to breach your tax-free threshold or, the sin of all sins, decide not to declare the sale to HMRC.
However, for those playing by the book who invest £10k or more into gold coins, the last thing you’ll want to do is give almost a third of your profits back in tax. For this reason, we always prefer mixing Krugerrands with a portfolio of coins such as the UK tax free coins – The Sovereign and Britannia. This way a shrewd investor can dispose of these assets strategically so they never pay any tax at all!
Contact Physical Gold
Is a Krugerrand a wise investment? You bet! Why not contact Physical Gold Limited to discuss Krugerrand gold coins and silver coins investment. Call us on 020 706 0 9992 to also discuss buying gold bars and silver bars too. Visit our contact page for general contact information.