Buy gold! Sell silver! 

There has been a lot of news around the price of precious metals. And not just in the past or so, when silver went into an up-to 40% nose dive briefly. 

Some of the value of some coins is directly attributable to their bullion value, the value of the gold (usually) of which they are made. 

So how should coin collectors react to highly volatile precious metals markets or record-setting highs for silver and gold? 

A Royal Mint graph of the gold price in 2025. The line goes up. 

Precious metals as a value store 

We’ll use gold as the perfect archetypal example of a precious metal here. The gold standard if you like. 

There’s a fair amount of aesthetic value, psychology, mythmaking around gold. 

But, the chief driver of its value is rarity. 

When Bitcoin was introduced, it was as a totality. 

That was the attraction. 

Unlike fiat currencies, which gain their value from a state’s backing, they said they would never mint more Bitcoin once 21 million coins had been mined. 

And we have a pretty similar understanding of gold. 

A Welsh gold miner in 1938. Gold deposits have been much studied and we think they're fairly well understood. 

 

The World Gold Council says that: “The best estimates currently available suggest that around 219,890 tonnes of gold has been mined throughout history, of which around two-thirds has been mined since 1950.”

And, there are believed to be underground reserves of around 54,770t. Those are deposits that we are fairly sure about. The “resources” of 132,110t is a more speculative figure. 

Gold is virtually impossible to destroy (another attraction), and so that known, mined figure is a good measure of what exists now. 

Gold in and behind currencies 

Because of its durability, malleability (it’s easy to strike with images), and rarity, a hell of a lot of currency was made of gold. 

In time, actual gold currency was replaced with a gold standard. 

This isn’t the place for a long discourse on economic history, but the (sometimes fictional) thesis of the Gold Standard is that currency can be exchanged at a fixed rate for gold held by a currency issuing bank. 

The First World War ended the Gold Standard, and it was in this period that gold coins ceased to be issued as circulating coins, that is coins that you or I could use in a day-to-day transaction. 

A run on a bank in 1930s America. In the end, linking currencies to gold couldn't be maintained. 

 

And one of the reasons they stopped being issued is that gold was sometimes more valuable as a raw metal than as, say, a dollar or sovereign coin. 

And, at that point, it’s quite likely that gold coins will cease to circulate in a way that the economy needs and start to accumulate under floorboards. 

The St Gaudens Double Eagle 

The way this might impact on collector’s coins is nicely shown in the case of Executive Order 6102. 

On April 5, 1933 President Rossevelt signed the order that attempted to stop gold hoarding (including of circulating coins) by basically ordering the people of America to hand it in. 

At the same time, the US Mint was processing the year’s issue of double eagle coins ($20 face value), which were struck, but then melted down. 

The few survivors have become the most sought-after rarity in coin history. 

Among the most beautiful coins ever struck by the US Mint, the 1933 St Gaudens Double Eagle was made the most precious coin ever by extraordinary political events. 

Bullion coins 

Most modern gold coins are issued as bullion for investors to buy gold. 

Mints also produce all sorts of special and limited editions of these coins that are designed to have some extra “collector’s” value. 

But most are bought in order to store gold. 

Collector’s coins 

Which brings us to you. 

And your collection. 

Collector’s coins are those that are worth more than their face value because of their rarity or distinction as coinage. 

At what point will you need to factor in the price of bullion gold in assessing your question? 

The answer is almost certainly never. 

The 1917 sovereign surpasses its raw gold value because many were sent to the US to pay back war loans.  

 

Your coins are free-floating in value, and can be traded on pretty open marketplaces. If you can find a buyer you can sell your coins.  

And, if you own gold coins you should think of the price of gold as a floor to their value. 

Let’s use sovereigns as an example. 

If I go to an online site buying sovereigns now I will find that the vast majority of their prices are identical or nearly identical. 

For example: 

One site lists the price of gold as £3,585.91 per oz, and is offering around £840 to £850 for the vast majority of sovereigns. 

A troy ounce is 31.1 grams, and a sovereign weights approximately 7.98g

So, it’s round about the quoted sale price for gold, which I calculate to about £920. 

(There are transactions fees around most gold purchases). 

Only very old sovereigns are more valuable, because these coins start to have a rarity value. 

For example, William IV sovereigns come from a short reign (1830 - 37), are enjoyed for their William Wyon portrait, and have an additional rarity from the absence of an 1834 issue. These are selling to our on-line site for nearly £1,400. 

William IV's short reign makes coins issued with his head on them a rarity.

 

Unless, we’re looking at a coin with almost no collector’s value - so worth it’s bullion value and almost nothing more - and with incredible, high-speed volatility in gold markets, there is almost no situation in which selling a collector’s coin for its gold value alone makes sense. 

Of course, if you have precious metal coins of little distinction (or duplicates) then now may be a good time to trade those in for non-precious metal coins of greater numismatic distinction. 

If you are willing to play something of a gambler’s game, you might look at these high gold prices and think you can play the market, by cashing in on the rise in the floor value of your coin (its bullion value) banking on a fall in gold prices that will then allow you to use the money you make to buy something better quality. 

You’ll need to be lucky and quick to do this successfully. 

Stability and instability 

Collector’s gold coins have their rarity value to distinguish them from just bullion.  

While gold prices may yet fluctuate in all sorts of ways, collector’s coins will not lose the scarcity that adds value. 

(Though, all markets are subject to variations.) 

So, most collectors can enjoy the fact that gold values will push up the floor of the value of their collection. 

And bullion coin buyers might be advised to look for coins that have, or may have in future, some sort of collector’s value in future. 

So perhaps collectors might see these price rises in gold as a cue to do the opposite of cashing in on the bullion value in their collector's coins, by seeking out real, long-lasting value in bullion coins. 

You can see a small number of our coin holdings here. 

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