Investment Bullion -
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As a nation, we have been fond of all thing British for centuries. So much so, that good copies attract a premium rate just for the satisfaction of having a British 'guinea', as the sovereign is popularly known. Examining the gold guinea's journey, we will see whether this position still has validity today in India as investment bullion of choice.
Sovereigns minted in India
Sovereigns were minted in the mints of the British Empire for many years, including our very own Bombay mint which last made these coins in 1918.
These sovereigns were commonly in circulation as currency until around 1914, when due to the government's demand for gold in the First World War there was a shortage of metal currency. Gradually paper money superseded the valuable investment bullion metal money around the 1920's. This pattern spread across all major governments.
Origins of the Sovereign
The origin of the sovereign can be traced to the reign of Henry VII who issued the first 20-shilling (one pound sterling) gold coin in 1489. This new hammered gold coin weighed 0.5 troy ounces or 15.55 grams, and was of high standard gold alloy of 23 carat quality, equal to 95.83% fine.
That coin would have been similar to the Elizabeth I hammered gold half ounce coin seen here with the Rose symbol of the Tudor dynasty.
The first modern sovereign, shown on the left, was minted in 1817 by order of King George III. An Italian engraver, Benedetto Pistrucci (1783-1855) created this beautiful original and now classic design for the reverse side of the sovereign. It shows the patron saint of England, St. George, killing a dragon.
For almost two hundred years now, this motif has been on the reverse (tails) of all British sovereigns, making them the most well-recognized of all gold coins in modern times. This also makes it the most copied ('duplicate') coin in India today.
The 'heads' or front face (obverse) of the sovereigns have been graced by the likeness of various kings and queens, but the reverse, with minor changes has always had this classic design, with one grotesque exception in 2005.
The modern ugly sovereign
In 2005, a fascinatingly ugly modern version of St. George slaying the dragon appeared on a five pound gold coin.
It has a comic-book ghastliness quite at odds with the classic history of the coin, and is more suited as the emblem of a comic-book villain. It's only possible redeeming quality is that it is gold.
Fortunately, this grotesque coin was limited in production to the year 2005.
Sovereigns are also issued in limited 'proof' editions that have specially minted and certified coins with a numismatic or collector-coin value greater than the intrinsic gold content value. Proof coins are made with a much higher standard of finish, eliminating the small imperfections and 'knock' marks or scuffs that may appear even on the 'uncirculated' coins.
Such knock or 'bag marks' on un-circulated coins appear due to the handling of the coins and contact with other coins. In all other respects the specifications of weight and quality of gold alloy remain the same.
The 2005 sovereign would also have its share of collectors--it might even have a contrarian higher value than some of the other proof coins due to its unparalleled unattractiveness!
Collector coins' or rare coins are not recommended as investment bullion for our situation mainly because such coins are very thinly traded in India, and there is no ready market for them here.
You can read more about this at the 'India Bullion' article, if you have not already done so.
Specifications of the sovereign
The specifications for all modern gold sovereigns from 1817 onwards are: Diameter: 22.05 mm , Thickness (Depth) 1.0 to 1.4 mm (variable to account for the relief height of the design). Weight: 7.9881 grams of 22 carat gold, or 917 parts of pure gold per 1000 parts by weight.
Actual gold content: 7.3224 grams or 0.235421 troy ounces.
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