Is it worth investing in gold sovereigns? Can you make a guaranteed income from them or is investing in them just another gamble that you should avoid? Welcome to today’s interesting article in which we shall address a topic that everyone who is trying to make their way into the precious metal investment industry should be conversant with. My hope is that by the time you’re getting to the end of the article is that you will have enough information to enable you to decide whether or not to invest in gold sovereigns. Read on to find out what lies in store for you.
Introduction to Gold Sovereigns
Anyone who has purchased and owned gold coins in the past will relate to the fact that it can be quite satisfying to invest in sovereigns. Being one of the world’s most popular gold coins, sovereigns symbolize the quality and rich history that has for a long time been associated with The Royal Mint.
These coins were first minted in 1489. From 1817, they began featuring the very iconic St. George and the Dragon design, which is quite unique in itself. The fact that this coin was first minted back in the 15th century makes it one of the oldest gold coins in the world that are still in production in the present-day world.
Sovereigns are created from 22ct gold, and they weigh about a ¼ of an ounce, making them a very popular gold coin investment. Despite all this information, most people are yet to invest in sovereigns because they do not have some answers to several questions that we shall address in the rest of this article.
Why should you consider investing in gold?
Nowadays, it is quite common for financial advisors to recommend the purchase of gold to their clients, as an approach to diversifying their investment portfolio.
Just as is the case with stocks and shares, the price of gold is bound to fluctuate over time. Gold has, however, managed to hold its value even in times when the world was in an extreme financial crisis. The same has been observed during the times in which the other markets are very volatile.
Some of the ways you can invest in gold include:
- Purchasing gold bullion (bars and coins)
- Buying gold-mining company stocks
- Buying gold sovereigns
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Why should you consider investing in gold sovereigns?
Gold sovereigns have been a valued possession for numismatists, who often cite age, weight, and beauty as the common reasons behind them purchasing this type of coin. As an investor, however, here are some top factors that you should consider:
Having been first minted in 1489, these coins bear rich history. The image of St. George slaying the dragon is featured on the design of this coin, carrying with it the display of the exceptional talent of Benedetti Pistrucci.
These coins were originally minted in London, but can now be found in mints located in Australia and South Africa. Having celebrated its 200th anniversary back in 2017, gold sovereigns remain a flagship coin of what we presently know as the British Royal Mint.
They are easy to trade
Although gold sovereigns have a £1 face value, they are worth far much more. They are, however, of a small size making them more popular amongst investors in comparison to the Britannia and Krugerrand. The fact that they are quite small and relatively affordable makes it possible for them to be traded easily, offering much-needed liquidity in time of need.
One thing that every investor can be happy about when purchasing sovereigns is savings on taxes when purchasing or selling them. All the British sovereigns and Britannia that were produced after 1837 do not carry the Capital Gains Tax (CGT), owing to the fact that they are perceived as legal tender.
Some gold coins are usually exempt from VAT, though the rules on these matters are quite complex. In most cases, if a coin is purchased as a gold bullion investment, then there is usually no VAT to pay. If, however, a coin sells for over 180% of its gold content (which is often the case with rare coins), then its falls under the collectors’ items category, for which VAT must be paid.
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Which sovereigns should you invest in?
There are several types of gold sovereigns, which all bear their unique benefits. Some of the main ones you might want to consider as you get started with gold investments include:
- Pre-1604 sovereigns
- Post-1604 sovereigns – King George III 1819 sovereign, the 1859 Victoria “Ansell” coin, Wiliam IV 1836 sovereign.
- 1900s sovereigns- Edward VII Sovereign, 1916 George V Sovereign, 1917 George V sovereign, 192- George V Sovereign, 1921 George V sovereign, etc.
- Gold proof sovereigns
- Half sovereigns and quarter sovereigns
- European and overseas sovereigns
The price of gold sovereigns is bound to rise and fall, but the main benefit they hold when one invests in them is that they have real and permanent value, which is something that is not present in other assets such as shares.
Historically, sovereigns have held their “spot’ market value, despite the ups and downs in the global economy, with some of them promising very great returns due to their rarity, aesthetic value, as well as historical appeal. Such sovereigns offer the benefits of purchasing and holding gold bullion and numismatics, all in a single coin.
If you want to reap the benefits of investing in gold sovereigns, my advice would be that you focus on the pre-owned sovereigns which are also referred to as bullion coins, as well as the secondary market sovereigns, since they offer better value, ensuring that you get top dollar for your investment. The new issues may not be the best option, since they are often overpriced as they’re produced to meet the needs of investors who take pride in owning them.
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That will be all for this article in which we have discussed whether it is worth investing in gold sovereigns. I hope you found this article helpful, and that you now know whether you will purchase some gold sovereigns to add to your precious metal investments portfolio. Let me know what your thoughts are, and whether you would need some help getting started with gold investing.
I wish you well,
Eric, Investor and Team Member at Gold Retired!