Gold Sovereign Facts
The gold sovereign is a United Kingdom gold coin. It is now regarded as a bullion coin. This means that its greater value comes from the gold it is made from,even though it remains legal tender with a nominal value of £1 (one pound sterling). The sovereign gets its name from coins which were last minted when King James I was on the throne of England. The UK minted them from 1817-1917; again in 1925; and every year since 1957. Other former British colonies have minted gold sovereigns at some time in their history. These are predominantly Australia, Canada, India, Canada, and South Africa.
The gold content was fixed by the coin act of 1816 at 22 carat. The weight of a sovereign was constant from 1817 until 1971, when The Coin Act, implemented when the UK adopted the metric system of currency, changed the weight by a tiny fraction from 7.988052 to 7.98805 grams. These are the current dimensions of a UK gold sovereign:
- Fineness: 22 carat
- Weight: 7.98805 grams.
- Gold Content: 7.322381 grams.
- Thickness: 1.52mm
- Diameter: 22.05mm
You may have heard stories that a billion sovereigns have been minted and so you would expect them to be pretty common. That is not the case. During the reign of Queen Victoria, it was common for the Bank of England to take worn coins out of circulation and melt them down for recoining. This means that the billion includes a high proportion of the same coins that have been reissued over and over again.
It is also true that any coins that were sent abroad to pay foreign debts would have been melted down and turned into bars as a matter of course. Very many coins ended up in the USA and suffered this fate. It has been estimated that the number of gold sovereigns in circulation today could be as low as 10% of the total issued.
Many examples are worth more to coin collectors (or numismatists, as they are correctly called), than for the value of the metal they contain. It is important that you invest in a reference work before you buy and sell gold coins. For example, a 1923 South African sovereign minted in Pretoria can be worth up to £7,000. Early Victorian examples (1832 and 1833) can be valued at up to £5,000, depending on condition. There are many such examples.
British law has a minimum weight a sovereign must be to be considered legal tender. This is 7.93787 g – or 0.6% of the original weight. This was to allow for abrasion and it was reckoned that a coin in circulation would suffer this scale of decline after 15-20 years in circulation. It was common for crooks to take a leather bag containing gold coins and small stones and shake them together for many hours. The resulting gold dust was then collected and the process would be repeated. Around half of all Victorian sovereigns were kept as collateral or as bullion, and so were not in general circulation.
Sovereigns were minted in fairly large quantities until the First World War, which is when the UK withdrew from the gold standard. From 1917 until 1932, they were minted only in Australia, Canada, India, and South Africa. A tranche were produced in London in 1925 when Chancellor Winston Churchill attempted to get Britain back into the gold standard, but this failed.
We can thank British spies for the return of the gold sovereign in 1957. It appears that the British government was very keen for the coin to retain its value in the Middle East in the face of Syrian and Italian fakes that were beginning to flood the market. The newly minted gold coin was produced as bullion for 25 years, only to fall out of favour again in 1982. Tony Blair’s Labour government re-minted from the year 2000 and it has been in production ever since.
Today the gold sovereign looks like a relatively small coin. At the turn of the 19th century its £1 value had the same buying power as £174 today. As gold is a dense metal, a coin contains a quarter of an ounce of metals, most of which is gold.
How To Spot A Fake
Gold is a difficult metal to counterfeit. It is one of the densest metals and therefore much heavier for comparable size or volume than the usual metals such as lead, brass, copper and steel that are used to make fake bullion coins. Fakes will be either oversize or underweight, or both, and an experienced coin dealer can usually spot such fakes right away as they are obviously underweight or are of the wrong size or thickness.
Nevertheless there are fake coins out there. Sometimes the gold is changed or alloyed with a substitute metal to look yellow and precious. A common method is to substitute 22 karat gold with 9 karat. Again, they can be spotted because of the difference in weight. Beginners are often taken in by this ruse and so they should be very careful where they purchase their sovereigns.