Sovereign Gold Coin: For Investors or Collectors?

2012gold soveregin

The first gold sovereign was minted in 1489 by King Henry the 7th. It had a value of one pound sterling. The first sovereign represented Henry sitting on his throne, hence the name “Sovereign” or the King came from.

The Old Sovereign Reborn

In 1816 the gold British Sovereign was first introduced, and as the British Empire expanded under Queen Victoria during the 1800s, this coin became the world’s most widely distributed gold coin. The Sovereign is a popular coin for investors and collectors alike.

Gold sovereigns minted since 1817 contain exactly 22 carats of pure gold .The remainder are made up with a copper alloy. The alloy compensates for the flexibility of gold and ensures that the coin is tough enough to survive normal handling when in circulation.

The British Empire at its height was the most successful and populous empire to have ever existed. Its wealth and resources were incomparable. The British sovereign was representative of this empire and was accepted the world over as a means of exchange.

Specifications of the coin:

Diameter: 22.05 mm.
Thickness (Depth) 1.0 to 1.4 mms.
Weight: 7.98 grams.
Alloy: 22 carat gold = 0.917 parts per 1000.
Actual gold content = 7.315 grams or 0.2354 troy ounces.
Date first issued in current format: 1817
First date ever issued: 1489

Sound Investment

Sovereigns should form a component of every precious metal investment portfolio. They are small in size and yet very valuable.
Like all gold coins, they can be transported and stored with ease. However, there is no Capital Gain Tax on the disposal of Sovereigns for UK investors. All investment grade bullion is exempt from Value Added Tax and Stamp Duty as per an EU directive brought into force throughout the EU in 2000.

Therefore, acquiring sovereigns is a sound investment in Europe, plus the added cultural value of this old coin to collectors makes it irresistible. It appears that gold sovereigns will continue to be struck every year for sale to collectors and investors alike as the demand never stops. They have become a very popular gift item for christenings and other special occasions. Keep in mind that gold value almost never change, unlike paper money which losses value overtime.