How to turn your interest in gold coins into a viable investment for your future

tax-free investment

Collecting gold coins

If you’re a coin collector, numismatic scholar or just a hobbyist with an interest in gold coins, it’s likely that you already have a great deal of knowledge of the UK gold coin market. Turning that knowledge into a profitable investment for your future is a very realistic endeavour, especially given the positive state of today’s gold coin market.

As you may already be aware, there’s a sweet spot in the UK market at the moment for semi-numismatic coins. In particular, Victorian, Edwardian and Georgian sovereigns are trading at higher prices than brand new sovereigns. These higher prices are due to the scarcity of these coins compared to their newer compatriots. This presents a prospective opportunity for collectors, who may wish to retain their collection for now, in anticipation of a potential value rise as the coins age. The alternative is to cash in on an existing opportunity to trade the coins, at a price currently above their intrinsic gold weight.

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Numismatic gold coins

The above scenarios are two examples of opportunities available to utilise your knowledge of coins for your benefit. The value of gold coins is based on their gold content, coupled with a further premium reflecting their historical worth and scarcity. Because numismatic coins are valued this way – both on gold weight and historical value – it’s possible to achieve greater gains than you may otherwise be able to achieve, if you were solely investing in modern coins. This can be particularly true if you begin to save now, for the longer term, or have amassed a collection already which you’re willing to start liquidating

However, if you’re just starting out in your coin collecting and investing, it’s wise to take care when interacting with numismatic or semi-numismatic coins. As some trade significantly above their intrinsic value, it’s feasible that you’ll pay a much higher premium. And whilst you may be able to recoup this premium upon sale, you may find yourself in a situation where it’s difficult to find a specialist buyer willing to match your valuation.

Specialist collectors may also wish to add to their holding with modern gold coins. Agility is required to capitalise on semi-numismatic coins, as they need to be purchased when premiums are low and sold at times when premiums rise. However, new sovereigns can be used to add flexibility to your collection and ensure you enjoy the benefits of owning gold coins over a longer period.

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Whether you’re a new or experienced collector of coins, Physical Gold can help with information on your collection, whatever your financial requirements. To learn more about how we help collectors and private individuals just like you, contact us here, or download our Guide to Investing in Gold and Silver.

Daniel Fisher

Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.

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