This hobby can be great fun as well as an interesting way of saving
The vast majority of women have a long forgotten coin somewhere, that could be the start of a collection. It could be one of the more recently minted collectors coins like the 2009 sovereign or you may still have a mixed collection of pre decimal coins.
Coin collecting has been popular for centuries, but over the last few decades it has become a recognised type of investment. The highly collected coins are those that were in circulation for only a brief period of time, minted with flaws or errors or of specific historical interest.
Rare coins have been collected for over 2000 years. The Romans collected Greek coins. The famous Flemish painter, Reubens had a fabulous coin collection. The House of Rothschild started as a coin shop. Other famous coin collectors include J.P.Morgan and the DuPont family.
If you are new to coins and would like to find out more free information on the subject visit our learning centre after finishing this page.
If you are new to coin collecting, make sure that you know some of the facts:
Buy top quality
Buy top quality coins, the high quality coins are subject to the high demand. In the coin market, as in all other collectables markets, condition is everything. For most coins, collectors aim for what is referred to as 'Gem quality', i.e. MS/PR65 or better on the 70 point coin grading scale. (for more information on coins see our learning centre)
Have a plan
Have a plan instead of just randomly buy coins. The easiest thing to do in the rare coin market is to spend money. In this area like with other collectable areas it is vital to stick to your allocated budgets. Do your research and quell your urge to spend using only a very small amount of your budget. The big long term winners either focus on a certain type or types of coins, or have built a specific collection. Focus is all important.
Know what you are paying for
Make sure you get what you are paying for, quality is a big component of price. For the coin market the 'gold standard' for third party grading services is the Professional Coin Grading Service (PCGS). Since it was founded in 1986, PCGS has graded and authenticated over 13,000,000 coins with a declared value of over $15,000,000,000. The PCGS website is well worth a visit as it has many useful resources for aspiring coin collectors.
Build a relationship
Get to know the dealer you intend to buy from. Before embarking on internet purchases of coins, it is important to attend a rare coin outlet. Visiting a physical outlet can help you to build your knowledge about the environment, language and the handling of the coins. Understanding the workings of the coin trade will help you gain a feel for what is right and what may not be. Building a working relationship with a coin dealer will assist you in the future, as they have a wealth of experience and may be able to point out many pitfalls in this market.
Be aware that reputable coin dealers can often sell the same set of coins for considerably less than your national mint. For example the Royal Mint's latest price on its George V mint mark collection was £1,245, but you could buy this same set from a reputable coin dealer for nearly £500 less.
Do not clean your coins or buy cleaned coins for investment.
Some collectors may buy recently minted South African gold Krugerrands and U.S. gold coins. But it is important to bear in mind that these coins have been churned out in their millions and may not rise much in value above the price of the gold. The Austrian Mint has issued a very popular Vienna Philharmonic coin which might be a better bet as far as new issue coins go.
Rare coins have shown consistent long term price appreciation. From major rarities to more inexpensive coins, top quality rare coins have had significant price gains over sustained periods of time. The 1913 Liberty nickel (only five known to exist) became the first $100,000 coin in 1972. In 2007, one sold for $5 million.
Louis Eliasberg (1896-1976) built up a US gold coin collection that cost about US$300,000. It sold for S$12.4 million at auction in 1982.
In the UK in May 2003, a selection of 50 coins from "The Slaney collection" were sold for £460,000. These coins had been collected during the 1940’s & 50’s at a cost of £2,350. So the sale price was approximately 195 times the original cost price. Not a bad investment! Also In the UK a buyer paid £460,000 for an Edward III double florin, known as a double leopard and with a face value of six shillings. The sale price for this rare medieval gold coin broke the record for a British coin.
At a Monetary Auction held in April 2006 in Sydney, a 1920 Sydney Gold Sovereign was knocked down in the auction room for $582,500 setting a new world record.
British coins have a long history
The first British gold coin should be regarded as the gold penny, struck by Henry III in 1257. From these early beginings some iconic coins followed during the reign of the Tudors and Stuarts. Continuing on to the creation of the gold standard of 1696 when the pound sterling would be made of a fixed weight of gold.
The industrial revoloution sparked another major change in the British coinage, with the introduction of the powerful steam powered coin presses. The Royal Mint moved from the Tower of London to nearby Tower Hill in1816.
Since 1871, British sovereigns were struck at branch mints. The first branch mint to strike sovereigns was in Sydney, Australia. It made good sense to produce British sovereigns close to the gold mining source areas, rather than ship the gold to London to be made into coins and then in some cases ship it back as coins.
The earliest known cheque was issued in 1659. But, paper money did not supersede metal until the second decade of the 20th century. During the first world war, gold bullion was needed to finance the war effort. Banknotes were introduced into regular circulation and within a few years, the gold sovereign ceased to be used in everyday transactions. Production at the Royal Mint stopped in 1917, although some were minted again in 1925.
The mintmarks used by the various mints are as follows:-
By the opening of branch mints in far flung areas of the British Empire, this extended the interest in collecting British coins to a broader geographic spread. Which has resulted in the current situation, with avid collectors in Australia, Canada, USA, South Africa and India amongst others.
It appears likely that gold sovereigns will continue to be struck every year for sale to collectors. They have become a very popular gift item for christenings and other special occasions. If the UK adopted the Euro at some point this may all change. But still today, if you are looking for a good gift for your children or grandchildren that may increase in value rare coins are worth considering.
Buying for the future?
Many countries now issue a one ounce bullion coin to be sold at a very low premium over the intrinsic gold value. Krugerrands are probably the most well known of these. First minted and issued in 1967 when the South African Chamber of Mines had an inspired idea to help market South African gold.
Krugers were never intended to be an aesthetically pleasing coin, just a lump of gold with a known weight and value. They certainly cannot be called pretty. Collectors seeking aesthetically attractive coins would be better looking at British gold sovereigns, or some of the newer bullion coins.
The Chinese version of the Krugerrand is the Panda. Pandas were introduced in 1982. The premium charged on pandas by the Chinese mint is higher than that charged for Krugerrands or most other gold bullion coins. Although this may make them slightly less attractive to investors interested purely in their gold content, it does not appear to have deterred collectors.
Gold pandas were extremely successful when they were first introduced. There are reports of the 1982 coins selling at over US$3,000 or over £2,000. The panda mania continued for several years, peaking in 1987. Since then issue quantities have dropped and many dates are not easy to find.
The Panda Family
Each year the reverse design of the panda is changed, which makes the panda series more interesting to collectors. Pandas are regularly produced in five sizes from one ounce to a twentieth ounce, although in some years much larger sizes have been issued, although in limited quantities. The Pandas are very affordable and children love them. They could be a good collector’s item for the future. For other coins that appeal to children or new collectors, take a look at Coins Australia for the Barbie coin.