-Investing in Gold Sovereigns

Although, the sovereign gold coin has been around for at least 500 years, investing in gold sovereigns is still popular especially in Europe.

The sovereign is a gold coin of the United Kingdom with nominal value of one pound sterling.  Prior to 1932 it was a fully circulating coin with Britain’s then Gold Standard currency.  Today, it is used as a bullion coin and is sometimes mounted in jewelry.  So what are the characteristics of the British gold sovereign, that can attract investors to actually go ahead and invest in gold sovereigns?

Investing in gold nowadays is neccessary for the following reasons:

  • To protect and preserve wealth from unexpected events.
  • Gold is a hedge when the stock market is not expected to do well.
  • Portfolio diversification.
  • The weak dollar
  • The loss of confidense in central banks
  • Geopolitical uncertainty (Middle East, Brexit, ISIS, North Korea, Hong Kong.)
  • The US China trade war.
  • The covid-19 triggered financial crisis

The first British gold sovereigns were minted more than 500 years ago.  They were minted under King Henry VII in 1489.  In 1816, the British Gold Sovereign as we know it today was first introduced, and as the British Empire expanded under Queen Victoria during the 1800’s, this coin came to be the world’s most widely distributed gold coin.  The design of Saint George astride his brave steed, slaying the dragon, is common to the reverse of all variations of the coin.

It is estimated that only 1% of all gold sovereigns that have ever been minted, are still in collectable condition.  It is this relative rarity in relation to bullion coins and bars that leads to leverage whereby, in gold bull markets the value of these coins increases by more than the actual price of gold.

Unlike paper investments or speculations, British sovereigns are a real and permanent tangible value.  Therefore, they offer two ways to build wealth.  They can offer the best of bullion and numismatics in one investment.  They contain the intrinsic security of bullion or precious metal in a pure form and can also offer additional profit potential, due to their aesthetic and historical appeal.

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