Investing in Gold Sovereigns

investing in gold sovereigns
English Coins

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

Investing in Gold Sovereigns – Background

The sovereign is a gold coin of the United Kingdom with a 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 necessary 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 Ukrainian war
  • The loss of confidence in central banks
  • Geopolitical uncertainty (Middle East, Turkey, the oncoming world famine.)
  • The US-China trade war.
  • The covid-19 triggered the 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 1800s, 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 collectible 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.


-How To Buy Gold Bullion Online

-How To Buy Gold Bullion Online

-How To Buy Gold Bullion Online

After lots of thinking and researching, you decide to go ahead and buy gold.  The big question is: how to buy gold bullion online?  Let me tell you, investing in the metal has never been easier with hundreds of online companies offering to sell gold coins or bars.

Before you go ahead and buy your gold, you will have to decide just how much of your portfolio will be allocated to gold.  The answer to that is: at least 10% of the total portfolio.  Bare in mind, I am talking at least 10% invested in tangible gold, (bullion coins and bars) not ETFs, gold stocks, or paper investments related to gold.

Many investors ask what percentage of their financial assets, should be in precious metals.  Well, there is the four part approach: gold, bonds, equities, and cash, at levels of 25% each.  However, this can change.  Some investors who are really concerned about the financial system have 60% to 100% in gold together with some silver.  If you have a 10% of your portfolio in gold, it can be enough to protect your investment.  It is up to the investor, what percentage of his/her portfolio will be allocated to gold.

The next step is to decide, what is best for you, gold bullion coins or gold bullion bars.  For the small investor coins, in my opinion, are a much better investment.  Let me tell you though, with a gold coin you cannot go to the supermarket and buy groceries.  Precious metal coins are the most liquid way to own bullion.

They are minted by governments and that makes them hard to counterfeit.  In addition, coins are easy to cash in and trade.  Do not get me wrong, gold bullion bars are a great way to invest,  but they carry high premiums, (commissions) unless the buyer invests in a multiple ounce bar.  Depending on supply and demand, premiums can fluctuate from 1% to 10%.  In this case the investment is worthwhile due to the very low premiums.  The problem is that a multiple troy ounce bar (1 kilogram) is difficult to liquidate.

Which coins to buy?  The most popular coins are the following: English Sovereign, British Britannia, American Eagle, American Buffalo, Australian Kangaroo, South African Krugerrand, and the Austrian Philharmonic.

You can also buy bullion bars, you have to make sure the refinery is an LBMA approved refinery therefore, you are getting what you’ve paid for.  Something else you will have to consider is storage, if you keep your gold bars in your own home, chances are they will need to pass an assay, before an investor considers buying them.  Assay, is a scientific examination on the amount of gold they contain.  To avoid all that best is your bullion bars to be stored at a secure storage company.

Under no circumstances you are to accept storage inside the banking sector.  This way you eliminate all chances of having your gold confiscated.  At the same time you will have to make sure your gold is stored under your name, and not under the dealers name.  You will also need a storage certificate under your name too.  This way you are protected in case your gold dealer goes bankrupt.  Make sure you have direct access to the vault, without a third party present. 

Furthermore, you need to select a reliable gold dealer.  Check out the comments regarding the firm especially the complaints, see how these complaints were handled.  If the there is a long list of complaints, then this is a sign to worry.  Also check the number of years the company operates, you want ten years of solid record.  Finally most important is to choose a firm with a commitment to keeping you informed.  Keeping you informed now and in the future.  If a sales person gives you a short shrift, or hits you with a high sales pitch, then this is bad news.

Finally, when you buy coins make sure you have them delivered to you.  They are your own property and you should not let third parties hold your precious metals on a permanent basis.  Good luck, and good fortune with your gold investment.