What Exactly Is a Bullion Sovereign?
We are always being asked the difference between bullion sovereigns and proof ones, or any other type of sovereign.
Bullion - Definition
It might be best to start with a definition of the word bullion. According to Webster's Dictionary:
- Uncoined gold or silver in the mass; the precious metals when smelted and not perfectly refined, or when refined, but in bars, ingots, or in any form uncoined, as in plate.
- Gold and silver regarded as raw material.
- Coin which is base or uncurrent, and therefore of only metallic value.
None of the above meanings appear to help explain perfectly the meaning of the expression bullion sovereign, however the reference to "of only metallic value" gives an important clue. When we speak of bullion sovereigns we mean sovereigns bought and sold based on the value of their metallic content.
Bullion or Proof?
Some confusion over the meaning of the word bullion seems to have arisen recently, and been caused by the Royal Mint. Gold sovereigns used to be a circulating coin, but the last date sovereigns were minted after they ceased to circulate was 1932. No sovereigns were then issued until 1957 (except for proofs issued for the Coronation in 1937) when the Mint resumed production to meet world demand for sovereigns as bullion coins, and to help control the number of forgeries which had started to be produced. These sovereigns were simply referred to as sovereigns or gold sovereigns, and were issued in most years until 1982 when production stopped. In 1979, the Royal Mint started to issue proof sovereigns for sale to collectors, and this still continues. In 2000, the Royal Mint decided to restart production of ordinary or normal non-proof sovereigns. To differentiate them from the proof version, they appear to have decided to call them bullion sovereigns, despite the fact that they are sold at prices which represent a considerable premium over their intrinsic metal value. Why they could not stick to established usage and call the non-proof sovereigns uncirculated, we will probably never know. The Americans solve this problem by calling non-proof coins a "business" strike, presumably so-called because it reflects the main business that a mint is involved in.
Proof coins are specially produced to a much higher standard of finish. Originally, proofs were intended as pre-production samples. As a printer would produce a small number of "proof" copies for checking and approval, so a mint would produce proofs for approval by the mintmaster, the monarch, and for other purposes. When coin collecting began to become popular about two centuries ago, a larger number of proofs were sometimes made for sale to collectors. This has developed enormously in the past few decades, and most countries, but not all, produce proof coin and sets every year or on special occasions.
Different Proof Finishes
Not all proofs are the same. The most common understanding of proof is that the flat background parts of the coin have a highly polished mirror finish, and the raised parts of the design have a matt finish, giving a higher level of contrast between the two. This is achieved by sand-blasting the die, the hardened steel punch with which the blank coins are struck, to give a matt finish, followed by giving the raised parts of the die a highly polished surface, usually by polishing them with diamond powder. The coin blanks themselves are usually produced to a higher quality of finish before striking. Proof coins are usually double struck at lower striking speeds, to give a higher and sharper definition. They are usually produced on a special machine, and may be hand, rather than mechanically fed into and extracted from the coining press. They are usually individually inspected, and packaged. A proof coin should provide an excellent specimen, and its quality should approach perfection.
Some proof coins are made with an all matt finish, as for example the 1902 Edward VII Coronation proof coins, while others are produced as "reverse proofs", i.e. with the raised parts polished and the background matt.
Uncirculated sovereigns, therefore, are new sovereigns struck to a normal circulation grade of finish, as opposed to a proof finish, although many mints take extra care when producing coins intended for collectors rather than for circulation.
We have shown two photographs, both of the reverse side of 2000 sovereigns. The photo on the left/top shows a proof coin, the photo on the right/bottom is of an uncirculated one. It is not easy to photograph coins. The background of the proof version looks a very dark chocolate brown, but in real life it is yellow. The contrast between matt and polished surfaces shows up very well on the proof coin and this allows fine details to be seen more easily, whereas on the uncirculated coin, the raised design is also slightly polished, and this results in it being more difficult to distinguish the details of the design from the background.
Which is the Better Buy?
Some collectors only collect proof coins, others only non-proof coins. For the non-collector, it can be difficult to decide which is the better coin to buy. We are often asked for advice when people wish to buy a sovereign as a gift. Our general advice here is that it depends what you think the recipient will wish to do with the coin. For use in jewellery, it is better to use ordinary non-proof coins, as proofs would be spoilt. If the recipient is likely to keep and display the coin in its original box, then a proof one may be better. If you are looking for an outright bullion investment check out these prices of our minty and secondary market sovereigns below:
Sovereigns in Jewellery
Even "ordinary" sovereigns will become worn and polished by wearing as jewellery, but this cannot be helped. Some people worry that this will detract from their value. While this is true, the same argument could be applied to almost anything. Using and driving a car will cause wear and tear, and will decrease its value, however it would be rather stupid for most people to own a car just to leave it in a garage and never drive it. It's similar with using sovereigns and other coins in jewellery. The important thing is to obtain value by getting the pleasure of ownership.
Investment and Future Value
Normally proof coins will sell for higher prices than non-proof ones, however this does not always apply. Our advice is to buy coins for the pleasure you will obtain by owing them, wearing them, or giving them. If you follow this advice, any future value will be a bonus.
Sovereigns as Gold Bullion
If you wish to buy gold bullion in the form of sovereigns, at a very low percentage premium over their metal value please visit our sovereign category page.
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We are not financial advisers and we would always recommend that you consult with one prior to making any investment decision.