Genuine gold coins can be a fantastic investment, a treasured heirloom to hand down through the family or an opportunity to protect your wealth for the future. Many people have already heard about these advantages, and more besides, but how do you take the next step to own gold? It’s unlikely that you have a ‘gold coin shop’ at the bottom of your road and, as we’ll discuss below, even if you did it might not be a good idea to buy from there! So, how exactly do you buy gold coins?
The advantages of gold coins
Gold is, first and foremost, a great way to protect your wealth. It’s not linked to stock market prices and so, in times of recession and market crashes, gold will often hold its value & provide a safe haven. This is because Gold is universally recognised as having an intrinsic value, so there’ll always be demand for it, which isn’t always the case with Company stocks and shares.
Coins, in particular, are considered to be a very liquid asset because they’re
smaller, they’re easily divisible. This means that if you required a relatively small amount of cash, you could easily sell a small portion of your holding.
In this way, the appeal of gold coins is enhanced by the fact that some dealers will even offer a buy-back guarantee for these coins due to their liquidity, typically at a higher price for their weight than bars.
As well as the opportunities for selling your coins in the future, there are also immediate purchase advantages. Coins are often available at a lower premium and are extremely tax efficient. This is because UK gold coins are technically legal tender within the UK, so there’s no VAT to pay and no Capital Gains Tax at the point of sale.
The different types of coin
There are many different types of gold coins on the market, but one of the most common UK coins, which benefits from the tax advantages mentioned, is the British Britannia. Like other well recognised gold bullion coins, it’s one ounce in weight and is a sound investment choice, whether you’re just starting or an experienced investor.
You can see a more comprehensive list of your bullion coin options here, including the South African Krugerrand, which is another common option for investors who want to diversify and move away from solely investing in UK coins.
It’s sensible to buy coins that can be sold easily
A vibrant secondary market is an absolute must when it comes to purchasing coins. This is simply because you will want to sell them at some point in time in order to realise your investment, along with a tidy profit. But, far too many investors buy obscure gold coins because they think it’s rare and has a numismatic value. When they try to sell it, they can’t find a buyer. So, it’s imperative to invest in coins that can add liquidity to your portfolio.
Royal Mint gold coins
These could be well-known gold coins like the Britannia or the Sovereign. Both these coins enjoy a reputation that stretches far and wide across the world and can be sold quickly at any place, any time. It’s also important to note that these coins are easily available and can be purchased in large quantities with bulk discounts. The Britannia, for example, does not command a rarity value as its editions are all fairly recent and do not go back centuries. They are mass-produced and are easily available with low premiums.
Gold coins can add divisibility to your portfolio
Buy gold coins for collection purposes
Investing in old, collectable gold coins (also known as numismatic coins) is a popular hobby for many, and collectors can make decent profits at any point, should they decide to liquidate their collection.
However, numismatics (rare, gold-bullion coins which are not quite at the point of being formal collectables) is a professional discipline of study, and for the casual or even professional gold investor, it’s normally recommended that you stay with modern gold coins.
If you do have a specific interest in numismatic or semi-numismatic coins, however, it is possible to purchase these via the same routes as those described below.
Is it possible to combine a passion for collecting with profits?
Several investors develop a passion for collecting over time. If you are developing a collection, it doesn’t necessarily mean that you should forego profits altogether. There are several collectable sets of coins available in the market that are attractive to investors as well, as collectors. A case in point would be the Queens Beast series of coins, which are released by the Royal Mint.
The set features the legendary Queens Beasts and two new releases are introduced into the market every year. The challenge of collecting the entire set lures several collectors. At the same time, these coins are an excellent investment, as values can go up by as much as 40% in one year. Therefore, they tick both boxes for the buyer – collectability and good profits.
How to buy gold coins in the UK
Once you’ve reviewed the information about gold coins and decided on your approximate purchase requirements, you have several options for the actual purchase itself. The main routes to buy gold coins in the UK are:
a registered and approved gold dealer
a jeweller
an online private seller (using a marketplace such as eBay)
an online portal seller
Each of these options can have their own strengths and weaknesses.
Registered and approved gold dealer
An approved gold dealer will typically be able to provide you with the best price, the best quality and the best choice of gold coins, due to their position at the heart of the gold marketplace and their associated buying power.
They offer added security with regard to quality, flexibility in the quantity you wish to buy and expertise when it comes to guiding you on which type of coin to purchase. Gold can be purchased for many reasons and a reputable gold dealer will be able to guide you on which type of gold coin will best meet your objectives. They should also have added services such as insured storage of your gold coins – should you prefer not to store them yourself. A reputable dealer should be BNTA accredited. The BNTA oversee the coin trade within the UK and dealers must meet certain criteria before they are awarded accreditation.
It’s important to discuss your investment objectives with your dealer at your first meeting or call. Once you can secure a place on the dealer’s mailing list, you will get to know about the best deals in advance. If a specific coin that you’re interested in becomes available, you’ll be the first to know. A clever way to purchase gold coins at lower prices is to wait until the market becomes quieter. Needless to say, there could be excessive demand in a busy market and prices would stay up.
Jewellers
Some jewellers will often hold small quantities of gold coins, sometimes with the intention of selling, as they would a ring or necklace.
The coins held at professional & reputable jewellers are likely to be genuine but may not be of the trading quality sold by a gold dealer. They’re also likely to hold a limited quantity and may possibly charge a larger margin, due to the likely intention that the gold is a gift, rather than an investment. Not a bad option if you want to buy gold coins in small quantities.
Private sellers
Gold collectors, and owners, can sometimes turn to marketplaces such as eBay to sell their gold to the mass market.
Whilst it can be tempting to sniff out a bargain on sites such as this, purchases from private sellers come with risks such as being fake, or low-to-middling quality and there is a lack of purchase guidance that you would receive from a reputable dealer.
Online portals
Some bulk sellers now offer automated online portals for gold purchases. This can be an attractive proposition for smaller purchases of perhaps one or two coins.
For larger purchases, however, these portals are usually unable to offer personalised guidance on your chosen gold, which can make all the difference to your returns and the value of your gold holding at a later point.
How to structure your gold coin purchase
Once purchased, you may decide that you wish to keep your coins at your home. If this is this case, we would recommend installing a security solution such as a safe. Alternatively, if purchased from a reputable gold dealer they will probably be able to offer you a secure storage solution.
There are also other options for your gold purchase, which may align with your wider investment objectives. A regular savings plan might be attractive – reducing your initial outlay and helping you save in smaller, manageable contributions to your overall gold coin holding. A gold dealer can discuss the options with you and help decide on the most suitable route forward.
The ‘secret’ to buy gold coins successfully is simply to understand why you are buying gold and to make a purchase based on your long-term aims.
The reasons for someone in their 50s purchasing a single gold coin to pass to their grandchildren, for example, will be very different from the reasons behind a 30-year-old purchasing to hedge their existing investments.
In each of the above scenarios, experts are there to help ensure your purchase is exactly right for you – furthering your overall aims and benefiting you and your circumstances.
Investing in gold coins can be highly tax efficient
Making tax-efficient investments
Tax efficiency is a key consideration for any investor. UK investors are fortunate to have VAT and CGT savings on UK gold coins. There are VAT exemptions on all investment-grade gold, which includes coins and bars (such as 1oz, 100g and 1 kilo). However, gold coins that are legal tender in the UK are also capital gains tax-free. This means any profits that you make from the sale of your investments in the UK gold Britannia or Sovereign will not be subject to capital gains tax. But, if you were to invest in a non-UK gold coin like the Krugerrand, the profits from its sale can be taxed.
Call Physical Gold for the best advice on buying gold coins
Physical Gold is one of the most reputed online dealers of precious metals such as gold and silver (bars and coins) in the UK. We have investment advisors who can guide you on the best gold coins you can buy. Our team makes recommendations and imparts advice after discussing your investment objectives. Give us a call today on (020) 7060 9992 or contact us through our website. We can help you build a robust portfolio by investing in the right gold coins.
Over the years we are regularly asked questions about sovereign gold coins. So, we decided to provide these handy FAQs with answers, which hopefully will provide you with all the answers you will need!
New sovereigns like the 2018 gold sovereign are a great investment
2) What are gold Sovereign bonds (SGB)?
SGBs are an alternative to holding physical gold. Paper bonds denominated in gold grams are issued by The Reserve Bank of India and offer a fixed maturity date whereby the investor receives back an amount based on the underlying gold price.
The total weight of a gold Sovereign is 7.98 grams or 0.2566 ounces. However, the gold content of the coin is only 7.32g, with the remainder consisting of copper and silver alloys to toughen the coin. Care should be taken not to mistake the Full Sovereign with the smaller Half Sovereign which weighs 3.99g.
6) How to clean gold Sovereigns?
The best way to clean dirty gold Sovereign coins is in a mix of warm water and liquid soap. Let the coins soak for 15 minutes before carefully wiping dry with a cloth. Boiling water from a kettle can be added into the bowl for stubborn grime. Avoid using a brush or strong chemicals.
The main value will come from the Sovereign itself. If the coin is in good condition and features a previous monarch, it will be worth more than an Elizabeth Head coin. The value of the coin itself is £200 – £300 depending on age and condition. The ring is likely to be lower purity so will only add a marginal value of 10-15%.
The value will depend on its condition and age. Brand new coins are worth around £240 each while Young Head Victoria coins are worth over £300 due to their age and rarity. Selling privately on an individual basis may yield higher prices if you can find a keen buyer. If selling in bulk, a gold dealer is best.
11) What carat is a gold Sovereign?
Gold Sovereigns are 22 carat purity, the same they’ve been for over 200 years. This works out around 916/1000 parts gold. The other two carats are a mix of copper and silver alloy. The exact mix can vary from year to year. This alloy mix ensures the coins are more resilient to scratched than 24 carat coins.
12) Which gold Sovereign coin is the most valuable?
The best overall place to sell gold Sovereigns is to a specialist gold dealer who will pay you based on the sell-on value rather than just a melt value. A BNTA accredited dealer is a must if you consider trust to be a selling consideration. Selling privately is an option for rarer Sovereigns as collectors may pay a premium.
15) How do I found out where to buy gold Sovereign coins?
Gold sovereigns can be bought in proof sets, these are published each year
16) Can you melt gold Sovereigns?
Under the 1971 UK Coinage Act, it’s illegal to melt down any UK coin with a face value. Which covers Sovereigns. More importantly, melting a Sovereign will devalue the gold, which is worth more minted as a Sovereign due to its tax efficiency as legal tender and recognisable trading format.
17) Can you spend a gold Sovereign?
Yes! Gold Sovereigns have a face value of £1, which means shopkeepers would have to accept it as legal tender. But with the gold content alone, pushing the value above £200, it would be foolish to use a Sovereign to buy goods.
18) One gold Sovereign is how many grams?
The total weight of a newly minted Sovereign is 7.98 grams. The old content itself weighs 7.32g, with the remainder consisting of a copper and silver alloy. Coins may weigh slightly less as they become older and wear on the face and edges.
Talk to our experts before buying or selling gold sovereign coins
We always love to hear from customers, new and old and are always here to answer questions about all precious metal topics including ones about gold sovereign coins. Why not call Physical Gold Limited now on 020 7060 9992 or complete our contact form. We look forward to hearing from you soon!
What is a Gold Britannia worth?
The value of a gold Britannia coin is based on the underlying spot price on the market, combined with the supply and demand for the particular coin. Generally, the 1oz gold coin will fetch around 96-98% of the current spot gold price. Gold Britannia coins have only been around since 1987, but certain years of issue are harder to source than others, so their value is higher than the current year of issue, sometimes by up to 5%
The spot price isn’t the only thing that affects the value of a Britannia
There are other factors that can affect the value of the Britannia. It is a larger coin and provides investors with more gold content at its price. This is simply due to the fact that larger gold coins enjoy lower production costs. When we calculate the cost of production against its price, we can see that the Britannia is available at a lower price per gram than smaller coins such as Sovereigns.
Easy availability and low premiums
A good thing about investing in the gold Britannia is that the coin does not command any kind of historical or numismatic premium. Apart from a few difficult to acquire years, most Britannia coins are easily available. You can also avail of bulk discounts if you order larger numbers. This enables you to acquire a larger amount of gold for your money, making it a lucrative investment.
Market supply and demand
During periods of intense economic, political or social turmoil, demand for gold tends to soar. We’ve experienced this repeatedly over the years as the economy goes through it’s various cycles. In particular, demand for gold investment coins such as the Britannia has been at all time highs during the recent Covid pandemic. While these ‘black swan events’ occur, it’s common for demand to out-strip supply significantly. The Royal Mint struggle to increase production sufficiently due to capacity restrictions.
In these circumstances it’s common that the value of Britannias increases sharply. Not only does the underlying gold spot price increase rapidly due to the increased demand in the gold market. But also, premiums rise to reflect the dynamic. Sellers benefit from obtaining higher premiums (near or even above the spot price), but buyers are forced to pay 2-5% extra.
A highly tax-efficient investment
Most investors simply focus on the price and ignore other key factors like the impact of taxes. Of course, all investment-grade gold is VAT free in the UK and the gold Britannia benefits from this tax-exempt status. Additionally, there is the double advantage of Capital Gains Tax (CGT) exemption, as the Britannia is a UK legal tender coin.
The iconic image of Britannia is shared by the gold and the silver version, pictured here
Currency conversions also affect the price
As you may be aware, the spot price of gold in the international markets is always quoted in US dollars. So, when you buy or sell the Britannia in the UK, this price needs to be converted to Sterling. You will need to divide the price in US dollars per ounce by 31.103. After that, you’ll need to look up the current exchange rate between the US dollar and the GBP. Once you apply the exchange rates, the current price of the coin can be derived. Now, we often see several websites in the UK quoting the per ounce price in GBP. But, you need to be aware that these websites have already done the conversions. So, we can see that it’s not just the movement of the spot price that has an impact on the value of a gold Britannia. Currency price fluctuations will always impact the final price of a gold coin.
Premiums need to be factored in as well
Now that we’ve explored the impact of spot prices and global currencies on the buying and selling price of a gold Britannia, let’s take a quick look at premiums. All gold investments need to be made at a premium, charged above or below the spot price. Premiums are charged to compensate for design, delivery and production costs. So, it’s important to factor this as well when calculating the price of a gold Britannia coin.
A winner on all counts
Ultimately, it’s a great coin to invest in. Once the price has been calculated, it’s important to remember that the gold Britannia enjoys a vibrant secondary market, providing liquidity to your investments. All these factors make the gold Britannia a truly versatile coin.
With central banks around the world still printing QE money going into 2022 to support their Covid-affected economies, the value of fiat currency is diminishing. Signs of inflation, possible interest rate increases and tax hikes, suggest to many experts that a global recession, the size of which we’ve never known, is upon us.
It’s no surprise then, that investors are increasingly turning to gold to provide some diversification and protection from the coming economic storm. But if most people are asked which gold coins to buy, they will be stumped.
The Krugerrand coin is one of those coins which most people, even my grandmother, have heard of and this is for good reason. For many, it represents one of the best choices of gold in which to invest your hard-earned money.
A South African coin first minted in 1967, the intention was to lure global investment into
buying gold coins from South Africa’s rich gold reserves. Up until recently the Republic was the number one producer of gold and has only just been overtaken by the Chinese powerhouse.
To appeal to the investment market it was the first coin to contain exactly 1oz of pure gold, ensuring a straightforward marketing proposition compared to the likes of a Sovereign which contains 0.2354oz. Interestingly this fixed gold weight rather than a fixed face value (like most other bullion coins) meant that the Krugerrand coin represented a convenient store of wealth regardless of inflationary levels.
Krugerrand coin most common globally
Despite no face value, the coin is legal tender in its home country and is therefore minted in a durable alloy mix. Its overall gold content is 22carat or 91.67% pure as the gold is alloyed with copper to provide resilience and maintain its integrity. This is one of its major selling points now. With approximately 50 million in circulation, it represents one of the most active secondary markets in gold coins and a vast majority of the Krugerrands we see of 30 or 40 years old are still in fantastic condition.
Indeed due to the huge number in circulation and its global recognition, the depth of the Krugerrand’s liquidity is only matched by that of the British Sovereign, a coin that has built up its liquidity over many more years. There are more Krugerrands in circulation than all the other gold bullion coins combined. As an investment into a physical asset, this is very important. Just like when buying and selling a house, it is not only the price you manage to purchase the property at but also the sale price which will determine your profit. If you buy a house for a great price but it’s on the main road and appeals to a very niche market, then it is more difficult to sell and the eventual sale price will inevitably be affected. The same goes for gold. Buy a Krugerrand and you’ll be able to sell the coin easily at any time, maximising your chances of securing a good price.
Incredibly by 1980, the Krugerrand coin accounted for 90% of the gold coin market. It’s a telling recognition of its success that it has spawned so many other copycats worldwide including the Canadian Mapleleaf in 1979, the Australian Nugget in 1981, the American Eagle in 1986 and the UK Britannia in 1987.
So the Krugerrand is a very liquid coin, easy to buy and sell and it maintains its condition well. But how does it’s price compare to other 1oz bullion coins? From what we see at Physical Gold Ltd, the Krugerrand offers amongst the best value of ANY 1oz gold coin. Due to its resilience to scratches, I’d recommend buying second-hand coins rather than the most recently minted. Like a new car’s premium, it’s almost always better value to buy a ‘nearly new’ version. Brand new Krugerrands can be 3-5% more expensive. I’d also try to steer clear of the smaller half, quarter and 1/10th ounce versions as premiums rise with each smaller coin. I’d also avoid Proof versions of the coin. Although pretty, I’m not convinced you’ll receive the same premium that you paid for the coin when you come to sell. Your best bet is to stick with the better value bullion version.
The only potential drawback I see for UK investors as that of Capital Gains Tax. Like a majority of other assets, any profits on Krugerrands have to be declared and are liable for tax of up to 28% if you breach the modest thresholds. Now, this may not be an issue if you only buy a handful of Krugerrands, have no other assets to breach your tax-free threshold or, the sin of all sins, decide not to declare the sale to HMRC.
However, for those playing by the book who invest £10k or more into gold coins, the last thing you’ll want to do is give almost a third of your profits back in tax. For this reason, we always prefer mixing Krugerrands with a portfolio of coins such as the UK tax free coins – The Sovereign and Britannia. This way a shrewd investor can dispose of these assets strategically so they never pay any tax at all!
Gold Sovereigns have been in circulation for over two centuries, making it one of the most popular iconic British coins with a large secondary market. The Royal Mint struck these coins, using 22-carat gold from the year 1817. They have now been put out of circulation and are available as a bullion investment coin. The iconic design of St George and the Dragon, created by Benedetto Pistrucci make these coins unmistakable and they are in great demand from numismatists and investors alike.
Gold sovereigns can carry hefty premiums depending on the monarch and the year. For example, the Young Head Victoria can fetch prices of around £300. There are even rarer ones like a proof set created for Edward VIII. A single coin from this set can command a price of £516,000. So, investors need to know how to sell these coins in order to maximise their profits.
Selling a gold Sovereign can be very lucrative
Identifying a reputed online dealer
Since the Sovereign carries a numismatic value as well, as its value in gold, it’s best to sell your Sovereign gold coins to a reputable gold dealer. This will ensure you receive a fair price that reflects the gold content and the numismatic value of the coin. Members of the British Numismatic Trade Association (BNTA) are trustworthy. Going through a reputed dealer can get you access to a wider secondary market, increasing the chances of a quick sale at a good price. Preparing to sell is a key factor. If you want the best possible price, let the dealer know in advance that you want to sell your Sovereign coins. It’s important to let your dealer know about the complete details of all the coins you want to sell. You must decide on a timeline for the sale. This will help your dealer identify the right buyer and bring the coins into the market at a time when the best price can be achieved. Don’t be in a hurry to sell, unless you need the funds for an emergency. A distress sale is always likely to get you a far lower price.
Some investors believe that they can get a far better price by arranging a private sale. But, be aware that it may not be possible for you to check the backgrounds of the buyers. It could be risky to have them visit your home. As an individual investor, it is unlikely that you will have a large network of interested buyers. So, you will be forced to depend upon only a few interested buyers who may have responded to your ad. Of course, it may also take a lot of time and effort to post your ads and reach out to the right audiences. A dealer would be far more adept at reaching out to interested parties.
Research your dealer well
You aren’t forced to sell through one dealer only. If you identify two or three reputed dealers, feel free to engage all of them. Doing your research means connecting with other investors and buyers in the marketplace. Find out all about a dealer’s reputation and background by speaking to other investors and viewing their ratings online.
Contact Physical Gold for the best way to sell your gold Sovereign
An effective way to properly market your gold Sovereign is to simply speak with our investment team. Physical Gold Limited is registered with the BNTA and have a long track record in providing exemplary service. Getting in touch with our team is easy. Simply call (020) 7060 9992 or visit our website to reach out to us.
King George V sovereigns are highly valued amongst numismatics due to being the last gold sovereign in actual circulation before the end of the Gold Standard in Britain. Over the years gold sovereigns have become a standout investment for collectors as they not only represent a significant part of British History but are also considered legal tender in the UK. This means they are Capital Gains Tax exempt.
Why do King George V Sovereigns make a good investment?
Gold sovereigns are one of the finest examples of British craftmanship, a symbol of a time when the British Empire was still considered great. George V was one of the country’s most popular monarchs and reigned during a time of great change, not just in Britain but throughout the world. His time on the throne saw the rise of new political movements such as socialism, communism and fascism, however, the advent of World War I in 1914 would have the biggest impact on his reign.
Up until the first world war, gold sovereigns were still a major part of everyday life. Just days after the start of the war in August 1914, however, people were urged to donate their gold coins. Sovereigns continued to be mined overseas but this period marked the end of an era for what had been one of the most important coins in British History. After the gold standard was abolished, there was less of a need for gold sovereigns and so the number of coins being minted started to go into decline.
Gold Britannias or Gold Sovereigns – which is the best investment? – a Physical Gold Video
It was under George V that the final two branch mints would be opened, one in India and one in South Africa. George V Sovereigns are the only coins to have been produced in six branches of the Royal Mint.
Gold sovereigns are considered semi numismatics. This means collectors buy them for both their bullion content as well as their numismatic (rarity/historical value) Due to the coins everlasting popularity with collectors from all over the globe, gold sovereigns are relatively liquid which means they are easily exchangeable for cash.
1914 George V Sovereign
The 1917 George V Sovereign
The 1917 George V gold sovereign is considered incredibly rare and is highly sought after by many coin collectors. This is due to many of them being melted down after World War I in a bid to help pay off Britain’s war debts to America.
The Ottawa Mint
The branch mint in Ottawa ceased all production of gold sovereigns during George V reign. Gold sovereigns produced at the mint up until 1919, when it closed for good, are considered exceptionally rare and valuable due to the mint producing far fewer sovereigns than other mintages. 1916 sovereigns, in particular, are highly sought after, as only 6119 of them were produced in that year.
George V gold sovereigns were produced in 91.67% fine gold (22 carats). The design of the coin was changed in 1929 to incorporate an inner circle and beading around the outside edge. This extra level of security made it much harder for forgers of the time to replicate the coin which is why the sovereign is still held in such high regard by collectors and investors.
Purchase George V Sovereigns through Physical Gold
Physical Gold offers a wide selection of gold sovereigns spanning over the last two centuries including those minted during the reign of George V. To browse our full selection of gold sovereigns please click here. For more information please give us a call on 020 7060 9992.
If you’re going to invest in gold coins, you will need to ensure they are the genuine article, rather than fake. But how can you tell if a coin is nothing more than a convincing counterfeit? Here are eight techniques to help you avoid being scammed.
Gold coins
How Do I Detect Counterfeit Coins?
1) Check gold and silver coins with a magnet
Anyone who knows a little about precious metals will already be familiar with the fact that gold and silver do not interact with magnetic forces. This means that a high quality, genuine coin should remain unmoved if exposed to a magnet.
If a coin that is claimed to have a high gold or silver content is attracted to a magnet, then it is likely a counterfeit that contains more steel or iron than advertised.
It’s worth remembering that for this reason, some counterfeiters use other non-magnetic metals like copper and lead. This means the magnet test should be carried out alongside the other techniques if it proves inconclusive.
Even the best counterfeiters in the world make mistakes, and with a well-trained eye, you should be able to spot the difference between the real deal and a fake. This applies to counterfeits of mainstream coins as well as rare collectable coins for investment.
To do this most accurately, pick up a magnifying glass, or go a step further and invest in a specialised loupe used by jewellers to get a closer look at the surface.
If you don’t have a genuine coin to hand, find a high-resolution image of the coin online and use this to make your comparison.
3) Weigh and measure coins
From modern silver Britannia coins to vintage gold half sovereigns, all high quality coins will have been struck consistently and only put into circulation if they adhere to strict standards for their dimensions and weight.
Because major mints are so reliable in these terms, spotting a fake coin is fairly easy. You just need a calliper and a set of electronic scales.
A standard set of kitchen scales will not offer sufficiently accurate measurements, so buy a scale that displays weights to at least two decimal places. Weigh the suspicious coin and if it is out of kilter with official figures by a significant margin, reject it.
Even a coin that is on the ball in terms of weight can still be a fake. By using a calliper to measure its depth and diameter, you will be able to spot any inconsistencies.
Counterfeiters find it almost impossible to create the perfect phoney coin which both weighs the same as the currency it is spoofing and also has the same dimensions. With the right kit, you can steer clear of dodgy deals.
4) Stack suspicious coins
Another obvious sign that a coin is not of sound origin can be seen in the relief. Even small variations in the height of the relief can become apparent with a straightforward stacking test.
All you need to do is place the coin in a small stack with other examples of similar heritage. Real coins will stack neatly and remain stable, while fakes that are not struck with the same attention to detail or high-quality craftsmanship will teeter, totter and tumble over.
Identifying uneven relief height using this technique does require that you have access to real coins of the same age and denomination. This might limit its usefulness if you are new to investing in or collecting coins, but will help those who are expanding an existing hoard.
Find fake coins with the stack test
5) Ping silver and gold coins
This technique is specific to gold and silver coins as a result of the properties of the metals and the noise that coins make when they collide with a hard surface.
Pinging is a straightforward test for valuable coins, as the sound produced by silver and gold as they hit a tabletop, or are struck against another coin, is unique. While coins made with lesser metals, including counterfeits, will sound dull when dropped, a genuine coin will ring out for longer and produce an unforgettable high-frequency sound.
Prepare yourself to scrutinise potential coin purchases by performing the ping test on a gold or silver coin you know to be genuine, or check audio examples online. That way you’ll have a fixed idea of what to listen out for later on.
6) Place an ice cube on the coins
Gold is a great conductor of heat, silver even more so. That means as soon as an ice cube comes in contact with the surface of a gold or silver coin, it will begin to turn back into liquid water.
If a coin is made of a less conductive and less valuable metal, this process will not begin as quickly. Try this test out with genuine gold and collectable silver coins to see what the reaction should look like.
Historic gold coins
7) Check the specific gravity of gold and silver coins
This is a far more technically advanced test than the others covered so far, which makes it a little harder to recommend to the average coin investor. However, arming yourself with as much knowledge as possible is always a good thing, so understanding the specific gravity test will be helpful for everyone.
The specific gravity of gold and silver will be unique and thus different from that of other metals. You can calculate the expected relative density of a coin made of a precious metal, then test it in real time using a set of scales, a container and some distilled water.
Weigh the coin, then fill the container with the water and place it on the scales, before resetting the measurement to zero. Tie a small length of thread around the coin and slowly place it into the water until it is entirely beneath the surface, but not touching the bottom of the container. Take a note of the weight that has been added and then divide it by the ‘dry’ weight of the coin you took earlier.
For gold, the specific gravity you are looking for is 19.3 for a completely pure sample. For silver, it’s 10.49.
8) Work with respected silver and gold coin dealers
If you want to avoid all of the complications that come with trying to detect counterfeit coins under your own steam, the best option is to only buy from dealers that have a good reputation.
This isn’t just about avoiding first-hand contact with con artists, but also about building up a trusting relationship with a company like Physical Gold which you can rely on for all your future precious metal investment needs.
Most of all you should avoid coins that are being sold well below their market value, or being pushed upon you by a dealer who seems eager to get the sale over with as quickly as possible. The signals of an attempt to shift fake coins should be clear, so long as you are willing to look for them and don’t fall for a deal that’s too good to be true.
Call or email Physical Gold for more coin advice
Our experts know everything there is to know about gold and silver coins, such as Sovereigns and Britannias. So, if you are thinking about investing and want more information, then the best option is to get in touch. Make a quick phone call to 020 7060 9992 or email us for outstanding coin advice.
Numismatics. It’s not a word many people will have heard of before. Perhaps you have heard in a quiz “What do you call a coin collector?” Numismatics refers to a steadily growing group of people who are totally fascinated by coins; all sorts of coins, old and new and from all different currencies.A Numismatist is a coin collector. Numismatics involves the appreciation of craftsmanship, finish and features – when you look closely at a coin it’s surprising what you can learn. Learn more in our article about Numismatics – the study or collecting of coins medals and paper money.
Adult and child counting coins
What is numismatics?
Numismatics is actually far more interesting than you’d think. Numismatics is the study of and collection of coins, notes and other forms of currency, it’s a huge and varied topic with plenty to keep you interested.
The word “numismatics” itself comes from the Greek word “nomisma”, which means “coin”, its first known use was back in 1790. The “nom” part you may also recognise from our own word “denomination”. The numismatic art itself refers simply to the study of coins and historic money, but nowadays numismatists are also interested in medals, online currency and paper currency too. Numismatics also concerns items that are similar to coins but don’t necessarily have any economic function: things like tokens, religious items or badges.
Numismatics vs Coin Collecting – How do the Two Compare?
So, do you want to be a Numismatist or coin collector? Well, don’t worry, you can actually be both! You can be an avid coin collector without practising the study of coins (history etc). behind them, or you can learn about the field without actually doing any collecting. We compare the difference between the two below.
What is coin collecting?
Conversely, coin collectors often take enjoyment in gathering together full sets of coins depending on what they are personally interested in. These could be Beatrix Potter or London Olympics 2012 celebration coins for example, or coins marking special times in history for the Royal Family.
What does a Numismatist study or collect?
A “true” numismatist goes well beyond mere collecting, it’s a passion and takes on the form of the study of coins and education. We go on to discuss subcategories of numismatics below, but essentially a Numismatist collects and studies coins, tokens, paper money, and a range of related objects. As a general rule, a numismatist will study currency from a social, artistic or historical viewpoint.
What are the Different Subcategories of Numismatics?
Numismatics is essentially about the value of a currency, the study of currency, how we use it and exchange it, as well as the physical currency itself. It’s about rarity, methods of manufacture and history of the coins. So, what does a Numismatist collect? Numismatics can be broken down into different categories, which we discuss below:
What is Notaphily?
Notaphily – this is the collecting, study and learning of paper money such as banknotes. The word is formed from “Nota” – a Latin word for “paper Money and “Phily” a Greek word for love – so essentially it’s the “love of paper money”. In more recent times Notaphily has also started to include collecting and studying of plastic notes too.
What is Exonumia?
Exonumia – “Exo” is the Greek for “out of” and Nummus is the Latin for “coin”. These include a broad range of items such as the collecting and study of coins as well as badges, key tags, medals, military coins, tokens (e.g. arcade, bank, casino, communion, membership) and toy money. These are just a few examples of aspects of collecting and studying Exonumia.
Here at Physical Gold, we go well beyond the study of coins and make Exonumia, investment-friendly too. Why not make money from your study of coins, by speaking to us?
What is Scripophily?
Scripophily – this is the collecting and study of securities such as bond certificates, stock certificates and other negotiable financial instruments. Scripophilists will often collect based on the antiquity, scarcity and aesthetic appeal of an item. Investment principles are often in the background, but undoubtedly if managed correctly Scripophily in the long-term can make attractive investment properties. Modern Scripophily is becoming trickier as the financial services industry moves away from paper-based to electronic systems.
What coins are worth collecting?
We now analyse some of the coins, which we believe are most worth collecting.
Royal Mail coins
For a lot of British coin collectors, the Royal Mint is where it’s at. Planning for new releases and eagerly awaiting the chance to get their hands on the latest designs, they jostle to be the first to place an order for a new coin and prepare to add it to the other Royal Mint coins in their collection. Infact, did you know that the Royal Mint website ground to a halt when it made available its phenomenally popular 2017 Peter Rabbit 50p coin?
Limited Edition Collectable Coins
When it comes to collecting coins, the ones which are most sought after are ones which were only in circulation for a short time, i.e. are limited edition coins. Historically significant or especially attractive coins are also popular, and excitement is further heightened by mints that are limited in numbers or metal type, for example, a gold coin that’s usually silver. A particularly famous limited edition mint includes the recent Star Wars: The Empire Strike Back silver coin which had a mintage across the globe of just 10,000.
The 1 oz Landmarks of Britain – Trafalgar Square Silver Coin (2018) is a 50,000 mintage limited edition Royal Mail coin
Minting Error Coins
Another category of collectable coins are minting errors, these are coins, which had some sort of error during the minting process. The main categories of minting errors are:
Hub and die errors – these include double printing, die-setting errors, areas missing from the design, die breaks as well as cracks and chips, as well as many other types too
Planchet preparation errors – these include minting blank coins, clipped coins, minting coins with varying thicknesses as well as cladding and lamination flaws
Strike errors – a range of errors in the striking process
Buying minting error coins can make a great investment. This is especially the case if these coins are bought early when premiums are often lower. As the years go by and error coins become scarcer and more sought after, the premiums paid can often rise dramatically.
Coins in a jar
Is Coin Collecting a Good Investment?
When it comes to coin collecting as a way of building an investment or pension fund there are no shortcuts. It’s not a quick way to “flip” some money or make a fast buck – it’s much more long term. Old and rare coins are pretty much always worth far more than their face value.
A lot of financial advisors are even suggesting you keep between 5-10% of your investments in precious metals and rare coins. Not only will this offer a little extra security but it will give a good foundation for building future wealth. Even if the stock market was to totally flop, your collected coins will retain their value and actually likely increase as investors plump more towards commodities. It’s potentially a fascinating yet lucrative hobby.
Is it Worth Seeking Dealer Advice About Which Coins to Buy?
If you’re interested in beginning a personal coin collection or in getting into numismatics, in particular, there are many coins which are very highly regarded, so if there are particular items you have in mind it’s important to get your order in as quickly as possible.
In our opinion, it’s essential to take advice and there’s plenty available from Numismatic publications and websites as well as through talking to dealers such as Physical Gold Limited.
How Can I Invest with Physical Gold today?
So, are you interested in the study or collection of coins and perhaps starting a fantastic new coin collection of your own? In our opinion, Numismatics is more than coins study or the collecting of coins medals and paper money – it should be an investment too!
Let us get you started. Whether you’ve been collecting for years or you’re just starting to dabble, Physical Gold can help with any advice about collecting or investing in gold. Speak to us on 020 7060 9992 or send us an email so we can help.
Live Gold Spot Price in Sterling.
Gold is one of the densest of all metals. It is a good conductor of heat and electricity. It is also soft and the most malleable and ductile of the elements; an ounce (31.1 grams; gold is weighed in troy ounces) can be beaten out to 187 square feet (about 17 square metres) in extremely thin sheets called gold leaf.
Silver Information
Live Silver Spot Price in Sterling.
Silver (Ag), chemical element, a white lustrous metal valued for its decorative beauty and electrical conductivity. Silver is located in Group 11 (Ib) and Period 5 of the periodic table, between copper (Period 4) and gold (Period 6), and its physical and chemical properties are intermediate between those two metals.
