Best of British: The History of Gold Sovereigns
The first Gold Sovereigns were struck in 1489 for King Henry VII. These large and heavy gold coins bore the Tudor rose and were a symbol of royal power and prestige. The first English coin to be valued at one pound, these early Gold Sovereigns were presented to the great and good.
Centuries later, the evocative name was resurrected for a new gold coin, first issued in 1817 by the Royal Mint. The first Modern Gold Sovereign featured a striking motif of George and the Dragon, designed by Benedetto Pistrucci, that has been regularly reused on Gold Sovereigns.
Gold Sovereigns quickly became a symbol of the British Empire. They were extensively used in international trade because they were trusted to contain a reliable quantity of pure gold. Called the 'Chief Coin of the World' by some, the long history of Gold Sovereigns gives them a unique appeal.
Collectable Commemorative Gold Sovereigns
Gold Sovereigns are still minted today though they are intended for investors and collectors, rather than for circulation. Recent Gold Sovereigns maintain the same specifications as their historic predecessors: 22 carat gold, a diameter of 22.0 millimetres and a total weight of 7.98805 grams.
The Royal Mint strikes new Gold Sovereigns every year. These annual releases feature varied designs, often to commemorate important national events like Jubilees and Royal Birthdays. A range of striking standards are now available including Proof, Brilliant Uncirculated and Bullion.
These recent Gold Sovereigns are issued in limited numbers, meaning demand is fierce. The introduction of the Half-Sovereign, Quarter-Sovereign, Double-Sovereign and the Quintuple or Five-Sovereign Piece has opened the market in Gold Sovereigns to a range of new buyers.
Gold Sovereigns are Crafted from 22 Carat Gold
Gold Sovereigns weigh in at 7.98805 grams, of which 7.32240 grams is pure gold. These coins have a fineness of 916.7, meaning that out of one thousand parts, more than 90% of a Gold Sovereign is gold. The equivalent of 22 carats, Gold Sovereigns are among the world's purest gold coins.
The remaining metal in a Gold Sovereign is copper, which gives them their subtle pinkish hue. Gold Sovereigns are not made entirely from gold because they were not originally bullion coins. Pure gold is soft and ordinary coins made from it would soon wear down as they were handled and exchanged.
The value of a Gold Sovereign is calculated by multiplying the current gold spot rate – the average price being quoted by bullion dealers – with the weight of gold in the coin: 7.32240 grams. So, if the current gold spot price is £43, a single Gold Sovereign is worth at least £314, based on gold alone.
Diversifying Your Investments with Gold Sovereigns
In uncertain economic times, gold is the choice of all sensible investors. During the last global recession, while property values fell, the price for gold increased dramatically. If your investment strategy favours long-term reliability, putting a portion of your capital into gold makes sense.
So why invest in coins like Gold Sovereigns, rather than gold bars? Well, the smaller initial outlay is one reason. A single Gold Sovereign will cost hundreds, compared to tens of thousands for one-kilogram gold bar. Gold Sovereigns represent an affordable bullion product for many investors.
Additionally, investors prefer the smaller size of Gold Sovereigns, compared to other gold bullion options. Holding a large number of small units gives you the option of selling portions of your portfolio at your convenience. This level of flexibility is just not possible with other bullion products.
Capital Gains Tax Free and VAT Exempt Coins
Gold Sovereigns are legal tender in the United Kingdom. This means you could spend Gold Sovereigns like ordinary £1 coins if you chose. More importantly, it makes Gold Sovereigns free from Capital Gains Tax: the tax you pay on the profit when you sell an asset that has increased in value.
The Capital Gains Tax (CGT) free status of Gold Sovereigns means you pocket the full value when you cash in or trade. With the CGT rate set at 20% for bullion, the unlimited tax-free profit that can be realised with an investment in Gold Sovereigns makes them an attractive choice.
Made with investment-grade gold, Gold Sovereigns are also Value Added Tax (VAT) free in the UK and the European Union. Unlike silver and palladium coins, Gold Sovereigns are not subject to the current 20% standard VAT rate, which is certainly a benefit when you come to sell.
Gold Sovereigns are Sought by Collectors
Buying Gold Sovereigns is not just about gold prices and tax exemptions. Many choose to purchase Gold Sovereigns for their historical importance or their artistic merit, as well as the rarity of some examples. Indeed, these factors can also lend Gold Sovereigns value above their weight in gold.
Sometimes, quirks of history make particular Gold Sovereigns exceptionally valuable. Edward VIII's abdication in 1936 meant that the handful of his Sovereigns that were struck as pattern pieces today sell for extraordinary prices. In 2020 an Edward VIII Gold Sovereign sold for a record £1 million.
Beautiful designs can also make certain issues of Gold Sovereigns particularly sought after. Benedetto Pistrucci's remarkable George and the Dragon engraving has featured on many Gold Sovereigns. The occasions when this design is not used are particularly interesting to collectors.
Buy Gold Sovereigns
A wide range of different Gold Sovereigns have been minted down the centuries. The earliest Tudor and Stuart Gold Sovereigns – bigger and heavier than their modern counterparts – are scarce, with fine examples demanding significant prices when they come to the market.
The first modern Gold Sovereigns, struck in the nineteenth-century, were intended for circulation. Examples are generally worn from time spent in pockets. Gold Sovereigns fell out of circulation in the twentieth century and, since 1979, have been minted largely as bullion and collectors' pieces.
These recent Gold Sovereigns are issued in limited numbers, meaning demand is high when they go on sale. The introduction of the Half-Sovereign, Quarter-Sovereign, Double-Sovereign and Five Sovereign Piece has opened the market in Gold Sovereigns to a range of new buyers.
Buy with Confidence from The Britannia Coin Company
At the Britannia Coin Company we are passionate about Gold Sovereigns. Our Gold Sovereigns quickly find homes in the collections of our valued customers. We are excited to share our industry know-how and help you invest in new and historic Gold Sovereigns at fair rates.
Based in Royal Wootton Bassett, Wiltshire, well known for its role in the repatriation of fallen soldiers, the Britannia Coin Company has been trading since 2008. We offer exceptional service and unbeatable value to our buyers via our website, over the phone and in our High Street showroom.
When you buy Gold Sovereigns with the Britannia Coin Company you buy with confidence. Order through our secure website and receive your Gold Sovereign by insured, tracked post. If you have any questions, our friendly staff are happy to help. Get in touch about your investment today.