What’s the Value of Gold Britannia Coins?

The value of a gold Britannia coin is based on the underlying spot price of 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. This is simple to calculate as the Britannias contains exactly 1oz of fine gold and the spot price is commonly quoted  as a price per ounce.

Gold Britannia coins have only been around since 1987, but certain years of issue are harder to source than others, so their value may be higher than the current year of issue, sometimes by up to 5% to the right collector.

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.

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.

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.

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.

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.

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.

2023 sees the introduction of the first ever Britannia coins to feature a monarch other than Elizabeth II. The new King Charles III will become commonplace, so it will be interesting to see if premiums rise slightly on older QEII versions due to a perceived collectability.

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.

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Image credit: Eric Golub