Collecting coins is an interesting hobby but can also be an extremely valuable investment strategy. There are many opportunities available to expand a coin collection at little cost, however if you plan to collect gold and silver coins the initial cost will be higher. Rare vintage coins may sell for enormous sums, but there are still many bargains to be had.

Early Gold Coins

The Romans mainly used silver coins because the metal was freely available, and could be made into a durable alloy by adding a small amount of copper. They regarded gold primarily as being primarily for jewellery and rarely used it for coins.

From the 6th century BC, coins were struck in relative weights, so that one gold coin was worth 20 of the same weight in silver. Something along these lines survived in Britain until the outbreak of World War I, with one gold sovereign being worth 20 silver shillings.

The fineness or quality of gold was, and still is based on a unit known as the carat which, as well as being a weight, represents a 24th part. Using this measurement, pure gold is described as 24 carat. The purest gold used for medieval coins was 23 carat 3 ½ grains (.997 fine), which was the highest quality that could be produced at the time. English gold was reduced to 20 carat by 1545, but was eventually set at 22 carat (.9167 fine). This was originally known as ‘crown gold’ due to its initially being used for the crown series of coins. The remaining percentage was made up of copper, added to produce a long-lasting alloy with a reddish lustre and this 22 carat gold continues to be used for sovereigns today.

The USA eventually settled on .900 gold fineness. Mexico opted for .875, while France and Germany preferred .900 fine. The first major bullion coin of recent times, the Krugerrand, was also minted to .9167 standard (22 carat; the most practical and hard-wearing quality), but later bullion coins were made for the highest purity. Canada achieved .999 pure gold for the Maple Leaf (from 1979), but improving refining techniques brought the famous ‘four nines’ gold introduced in 1983. Bullion coins now have both the weight and fineness of the metal inscribed on them.

British Gold Coins

Gold Guineas – The gold guinea was first issued in 1663 under Charles II and was named this because most of the gold came from Guinea in Africa. It was valued at 20 shillings, but this increased as the price of gold climbed. The very last guinea was issued in 1813, as the ‘Great Recoinage’ of 1816 replaced it with the pound, though it continued in common parlance valued at 21 shillings, until 1971 when the move towards decimal coinage made it obsolete.

It is important to remember the different finenesses of gold used when thinking of investing in or collecting old coins 22 carat was used for the sovereign (20 shillings), half sovereign (10 shillings) and crown (5 shillings), but 23.5 carat for the noble (6s 8d) and its sub-divisions. The gold guinea (21 shillings) was replaced by the sovereign in 1816.

A great way to save and make a good profit in this uncertain climate today with nearly zero interest rates, is to collect gold coins as the price of gold is always going up. In the last 5 years gold has shot up in price from approximately £230 at the beginning of 2005 to nearly £740 per ounce today. That’s an increase of over 200% for a 5 year investment, which I am sure you will struggle to find in any investment interest account.

The future is looking good for the gold prices to keep increasing as demand for gold from both commercial retailers and banks, keeps the gold price high, lots of people have turned to gold investment as the safest way to invest their cash and with the still uncertainty of the stability of banks , it seems gold is the way forward.

As with most things as demand for a substance outstrips supply then the price can only increase another good indication of this is the amount of adverts on the television from companies asking for you to scrap any gold you have. Normally these companies will not offer a decent price for your gold but due to the demand for gold then they are being forced to give customers a decent return at scrap value or just above the current scrap price for your gold.

Even if the gold price does drop in the next few months you can still be sure that eventually the price will increase, so for a long term investment opportunity I don’t think you can go wrong with investing in gold and one very good way would be to collect gold coins. This is not only going to be profitable but also interesting.

Once you decide to invest in gold coins you will have to decide which ones you would like to collect, there are lots to choose from on the market. To break them up you could decide on collecting a certain type of coin such as a British Sovereign/Britannia’s or South African Krugerrands which are probably the most famous gold coins but there are also American gold Eagles and Buffalos, Canadian Maples, Pandas from China, Philharmonikers from Austria, natural gold Nugget Kangaroo Wallaby Lunar calendar series which are all from Australia and Manx Angels and Cat Crowns just to name a few.

The value of coins will depend on the weight, condition, rarity and carat of the coin. Some people only collect uncirculated coins which normally sell for premium prices but if you are only interested in the gold weight, you will not want this type of coin as they are rare gold coins and so the price is higher.

Some rare coins are worth more because not many were produced in a particular year or they are very old. If you are just collecting the coins for gold weight then I would advise you to stay away from rare coins, but if while collecting gold coins you start enjoying them then it would be nice to have a few rare gold coins in your collection, this would also be a backup if in worse case the price of gold fell, then due to the coins in you collection being rare coins then the value of the coins would stay the same or even go up.

As gold coins come in various sizes, weights and quality then so the price will be dependent on a lot of these factors, the more rare coins will also increase the price and whatever you decide to collect the only thing in the end collecting gold coins will come down to your budget. Most of the best gold coins are 24 or 22 carat gold, these are the best ones to collect.

Coins like the British gold sovereign are 22 carat gold and weigh just short of 8 grams and can be bought new from the Royal mint for about £210, Half gold sovereign approx £125 and quarter gold sovereign about £67.50. The same gold sovereign you will pay £210 for if you decided to buy a Proof version of the same coin, date and weight will cost £294. So you can see there are all different things to take into account when deciding to collect.

There are lots of places to buy gold coins there are lots of sites which just sell gold coins, which is probably the safest place to buy coins. You can also buy the gold coins from eBay, but you have to be careful as there are fakes about and the best idea if you decide to buy from an eBay seller would be to check out their feedback to see if they are trusted sellers.

You can also go to and auction and buy gold coins, you will not normally pay as much for the gold coins as you would from the other two methods and at most auction houses you will pay just over the scrap value of the coin unless they are rare coins. If you buy from an auction house remember to add in the total price with commission and vat if applicable as this will increase the overall price of the gold coin.