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British Gold Coins

By: Bob Ethan

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Classic British Gold Coins

One of the best known and most sought after collections of gold coins in the world are the classic collection of British gold coins - Gold Sovereigns.. Because of their exiting and rich history and cultural value, old Sovereigns are in high demand by coin collectors. British Sovereigns struck in more recent times are in high demand amongst investors rather than collectors.

The first British Sovereigns were struck in the year 1489 by King Henry the VII. They had a nominal value of one pound sterling (20 shillings). But their primary use was as official bullion and not general circulation, so there is no marked face value on the coins.

The original Sovereign coins consisted of twenty-three karat gold, which is ninety six percent pure, and contained 15.6 grams of gold, or a half-troy oz. Under King Henry VIII, their purity was decreased to 22 karats(92% pure), that created a new standard of what is nowadays called "crown gold", a title still used today in both the UK and the United States. The gold content was lowered several times and fixed at 7.322 grams, or 0.2354 troy ounces, where it remains today.

The British Royal Mint has released various additional denominations of gold sovereigns, including 1/2 sovereigns with a nominal value of 10 shillings (1/2 pound sterling), double sovereign coins with an official value of 2 pounds sterling, and 5x British Sovereigns with an official value of five pounds sterling Aand then in 2009 the British Royal Mintfor the first time has issued quarter sovereigns with a nominal value of five shillings. It is obvious that the official value is not related to their real value in in these modern times.
Gold Sovereigns were widely produced until the First World War broke out, when the pound was removed from the gold standard.Until 1932, sovereigns were produced only at branch mints in British Commonwealth countries, specifically at mints in Melbourne, Sydney, Perth, Bombay, Ottawa, and Pretoria. Production was halted until '57.

From 1957 gold sovereigns began to be minted once again, to maintain the integrity of the Sovereign amidst widespread counterfitting abroad.

Up until '82, Soveregin British gold coins were produced as standard bullion, but from 1982 to 1999 were released only as proof coins for collectors. Since 2000, Sovereign gold coins are again being produced as standard bullion, with value determined primarily by weight in gold.

As mentioned earlier, British Gold Coins have an official value. However, their real value is decided by both the current market price of how much gold is in them plus variable numismatic value, which changes drasticallydepending on the specific coin and buyer demand.

Newly minted bullion coins should theoretically be valued at approximately the market value of their weight with a small premium, but collectible Sovereigns from the past can sell for much more. Throughout history, British Gold Sovereigns were often taken out of circulation by the British Mint and their gold content reminted into new coins. There were also buybacks of coins that had lost some of their weight in circulation, and were exchanged for full weight Sovereigns. Since so much remolding of old coins took place, old British gold coins are often very rare and have a high value to numismatists.

British Sovereigns are highly valed because of their historical and cultural character. Collectors love sovereigns and they can have tremendous numismatic value because of their history and rarity.. But old British sovereigns are probably inappropriate for investors who just want to seek profits rather than be hobbyists. Such investors would be better off staying away from numismatic coins and buying only bullion coins, because they're not very concerned with the coins' beauty. Recently minted Sovereigns would make a better choice for those people.

But even if buying bullion sovereigns as an investor, one potential pitfall of sovereigns is their strangekly measured gold content, which weighs in at 7.322 grams, and is nowhere to be found on either face of the coin. This could make Sovereigns less liquid than a 1 oz. coin, particularly outside of the UKwhere British Sovereigns are widely known. You could certainly take them to a bullion shop and sell them, and they would be recognized by the dealer. But if there is ever an economic meltdown and you need immediate liquidity for daily transactions, sovereigns may not be widely recognized. They still make a solid investment, but as an emergency supply of hard money, other standard weight coins are possibly a better choice.

Article Source: http://depositarticles.com/

Whether you're a collector or an investor or just simply curious, visit The Gold Market and learn more about British gold coins and more.

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