Buying Sovereigns

The best known precious metals are gold and silver. While both are used in the manufacture industrial appliances, they are better known for their ornamental value mainly jewelry and coinage. The world’s first coins were produced way back in the seventh century B.C., through the use of a measured and guaranteed amount of precious metal, gold or silver. These precious metals have thus commanded much higher prices than common industrial metals for many years and their demand is driven not only by their practical uses, but also by their role as investments and store of value.


Sovereigns which are just a store of value are mainly in form of coins. It is estimated that only 1 percent of all gold sovereigns that have ever been minted are still in collectible condition. The most popular sovereign is the bullion coin which is a coin struck from a precious metal and kept as a store value or an investment, rather than used in day -to-day trading. Some examples of sovereigns include; the South-African Krugerrands, the British Britannia, the Mexican Libertad, The Chinese Panda, and the Austrian Philhamoniker. All these coins are produced in the precious metal unit which is sealed of from the rest of the mint.

Why sovereigns?

Sovereigns are very attractive and they often posses a rich tradition and history. A single sovereign coin commands premium prices for use as a gift during special occasions such as christenings, golden weddings, coming of age, and even just as an attractive jewelry item in its own right. Investors have long known that semi numismatic gold coins can be solid investment choices. They retain their value in times of global geopolitical instability and when there is economic uncertainty, during systemic and monetary crises and in recessions and depressions.

Unlike most paper investments or speculations, British gold sovereigns have a real and permanent tangible value. Therefore, they offer two ways to build wealth and they can also offer the best of bullion and numismatics in one investment.

Counterfeit sovereigns

One major problem that one is faced with when buying a sovereign is distinguishing whether a particular sovereign is genuine or not. Detection of counterfeit sovereign coins can be done visually by comparison with known genuine coins, by use of a coin gauge, or by precise weighing and measuring the sovereign against the set standard dimensions. A small percentage of coins advertised on some internet auction sites are fake and purchasers should take precautions when buying unseen sovereigns. Purchasing sovereigns through recognized sovereign or bullion dealer is the most secure way of avoiding counterfeit sovereigns – always check their feedback on sites like Ebay. In most counterfeit sovereigns, pure gold is replaced or alloyed with a substitute metal to look like gold, whereas with numismatic fakes, the counterfeiter might use the correct proportions of gold, but try to replicate an older coin with special rarity value

Factors to consider while buying a sovereign

Some of the factors that one needs to be put into place before purchasing a sovereign include;

  • Look for damages and wear

  • Consider if its genuine or original weight

  • Know the grade of the coin

  • Consider the premium to be paid over the bullion value.

Market Trends

As it is the case with all types of business undertakings, demand plays a key role in sovereign pricing. When the demand is high the sovereigns fetch good prices and the opposite is also true when the demand is low. Demand for sovereigns is usually high in times of financial uncertainty and this factor might come into play in a big way.

Investment Advice

The future is not known and we cannot predict with any certainty what gold or any other commodity or currency will do over short, medium or long periods of time. However, there are some measures one can take as an advice when choosing whether to buy a sovereign or not. Some of them include;

  • Buying sovereigns in cheapest forms

  • Buying when prices are relatively low.

  • Comparing percentages and not prices

  • Buying from reputable dealers