Why the Sovereign Coin is a Good Investment

Gold is always a favourite among investors because its market value is more or less stable. Many well-informed investors have some gold in their portfolios in different forms. Some invest in the gold exchange while others buy stocks in a gold mining company.

A particularly good way to invest in gold is to buy sovereign coins, as attested by AtkinsonsBullion.com. Here are reasons a sovereign coin beats out the competition in gold investments.

Gold content

Each sovereign coin has about 7.3 grams of 22-carat gold (91.67% pure gold). This is the standard established by the Coinage Act of 1816. To find out the market value of a sovereign coin, you have to do some simple calculations. The current price of pure gold as of May 20, 2016, is £862.56 per troy ounce. A troy ounce is equal to 31.103 grams. This means that the price for a gram of 22-carat gold is £25.42. A sovereign coin, therefore, has a bullion (gold content) value of £185.56. As the value of gold goes up, so does the bullion value of the sovereign coin.

Numismatic value

The actual value of a sovereign coin is not just about the gold, however. Sovereign coins also have numismatic value. Some coins have a higher numismatic value than others do. This will depend on:

  • Condition
  • Branch and year it was minted
  • Rarity
  • Issue (bullion or proof)

For example, the 1917 sovereign coins from the London mint are very rare. Although over a million of that kind came out, most had gone overseas to pay debts and melted down. If you have such a coin, its value is about five times more than an ordinary sovereign coin. In terms of a condition, you can get the highest value if it is fleur de coin (FDC), which means it is in perfect condition. A proof coin is a pre-production sample, and usually FDC and never circulated.

Collector’s item

The value of some sovereign coins goes up when it is a collector’s item. A good example is a sovereign coin that has a mint error. Back in 1843 when there was a significant demand for sovereign coins, quality control slipped. Some sovereigns started showing up with errors. Some 1844 sovereign coins with an upside down “4” are still in circulation, and they are worth twice as much as other 1844 coins from the same mint.

A sovereign coin is a good investment because it can be worth more than its weight in gold. However, there are many counterfeits around. When considering sovereign coins as an investment, buy only from reputable sellers. When in doubt, send it to the Coin Grading Service (CGS).