The British Gold Sovereign

15th Feb 2014

The British Gold Sovereign occupies a unique place among gold coins due to its over 500-year long history and extensive usage across all continents. The Sovereign has not only become the most collected coin in the world, holding the record for the most expensive British coin sold in auction, but is also a world-class investment due to its status as legal tender in UK. It is the only coin that has been minted unaltered in size and weight continuously for nearly two centuries and its famous reverse design of St George slaying the dragon has become a world-famous symbol of unquestionable value, quality and integrity.

History

The British Gold Sovereign as we know today, is based on the English Sovereign coin which was minted from 1489 to 1603. The English Sovereign coin used to have the value of 1 pound or 20 shillings and it received the name “Sovereign” from the image of the monarch seated on the throne on the obverse of the coin.

English Sovereign showing the image of Elizabeth I

During the English Civil War and Commonwealth of England other gold coins such as Unite, Laurel and Guinea replaced it as the primary English gold coin. This continued until 1817, when Sovereign returned to Britain although with a new design.

Now the famous image of St. George & the Dragon was included in the newly minted sovereigns, this design was created by famous Italian coin engraver Benedetto Pistrucci.

1817 Sovereign with the image of George III

After the passing of Coinage Act of 1816, the gold sovereign once again became the leading gold coin in the United Kingdom and has since then occupied this position. The Sovereign is the flagship coin of the Royal Mint and was produced across other mints of the Commonwealth Countries, under a license from Royal Mint.

With the expansion of the British Empire in 19th century the Gold Sovereign became the leading bullion coin not only in Great Britain but across the world and is the only coin which has been minted across 5 continents—by Royal Mint and its branches at London, Melbourne, Sydney, Perth, Bombay, Ottawa, Pretoria and most recently in Delhi.

Indeed, the history of the Sovereign is intertwined with the history of England and its empire. The Sovereign can be considered the first truly global gold coin which was valued equally as a store of value across countries, cultures and has very much retained this position for the past 5 centuries.

Production

It’s estimated that more than a billion sovereign coins have been minted. Although, often old sovereigns would be removed from circulation and reminted as new sovereign coins after undergoing the whole melting process. So, the total number of sovereigns ever minted includes a fair number of coins which were reminted into new sovereign coins after being removed from circulation.

Since the end of World War II, the Sovereign was primarily minted in the United Kingdom as all the former colonies such as Canada, Australia and South Africa adopted their own gold coins after gaining Independence from the British Empire.

Text Box: 2015 Sovereign minted by MMTC PAMP in Delhi

But this has changed recently as the Sovereign has returned to India and is also minted in Delhi by Swiss- Indian company MMTC-PAMP under a licence from Royal Mint. The Royal Mint has full quality control and the coins minted in Delhi are similar to the ones minted in the United Kingdom except a small I mintmark for India. These coins like the ones minted in 1918 by Bombay Mint are legal tender in the UK.

Store of Value

Unlike other numismatic coins the Sovereign is a store of value as the gold gives it a tangible value. Due to its long history and ease of buying and selling, the Sovereign has long been a favourite of collectors and investors alike. Sovereigns have been issued as a commemorative coin on special occasions such as coronation of a monarch, silver and golden jubilees etc. The value of a Sovereign is like any other coin affected by the number minted, condition and the current price of gold.

At a minimum a sovereign will be always worth the value of gold which it is made of. Despite high number of sovereigns minted, it’s estimated that only 1% of all the sovereigns ever minted are in collectable condition and due to this collectors and investors are attracted to this coin.

Historical Returns

Returns of Sovereigns like other similar coins depend on a number of factors as we have discussed above. The general rule being that rarer coins give higher returns. Sovereigns minted in some years have given CAGR returns of over 15% over a 20-year period, comparable to other asset classes such as stocks, bonds, savings deposits, real estate etc. Investment in gold coins is a great way to diversify, essentially lowering downside risk in a sophisticated and risk-averse investor’s portfolio.

Because of the gold sovereign’s status as legal tender in the UK they are Capital Gains Tax and Value-Added Tax exempt. Buying and selling gold sovereigns for a total value of £5000 need to be reported to HMRC due to money-laundering regulations.

Sovereign coins minted for Edward VIII are considered some of the most valuable British coins, as King Edward VIII abdicated and as a result these coins never entered circulation. A 1937 Edward VIII sovereign was sold at an auction for £516,000 in 2014.

Another extremely rare sovereign is the first sovereign struck during Henry VII’s reign in 1489. In December 2014 Spink & Son of London sold at auction the only known existing example in private hands for £372,000.

Conclusion

Sovereign occupies a unique place among bullion coins and is one of the most recognizable gold coins which can be easily bought or sold in any part of the world. Few other coins can match its record when it comes to returns. is a must have for any collector or investor.