News & Views


Buy. Hold. Sell. Given their rarity, and their current price levels, there is a definite ‘buy’ on Australia’s proof gold sovereigns and half sovereigns.


1893 Proof Half Sovereign N&V August 2017

The allure of gold. Nothing compares to it, particularly when it comes in the form of a proof quality gold sovereign or proof quality half sovereign.

Several Coinworks clients are taking a position on pre-decimal proof gold coins, buying them up whenever they become available.

It is sound thinking given their extreme rarity and their current price levels.

In our view, they are great pieces to tuck away for the future. 

Photo shown above 1893 Melbourne Mint Proof Sovereign.


What is a proof coin?

In the striking of a proof coin, the mint’s intention was to create a single masterpiece, coining perfection.

Perfection in the dies. Wire brushed so that they are razor sharp. Perfection in the design, highly detailed, expertly crafted. Perfection in the fields, achieved by hand selecting unblemished blanks, polished to create a mirror shine. Perfection in the edges to encase the design … exactly what a ‘picture frame does to a canvas’.

A proof is an artistic interpretation of a coin that was intended for circulation.

A proof coin is meant to be impactful, have the ‘wow’ factor and exhibit qualities that are clearly visible to the naked eye.

A proof coin was never intended to be used in every-day use, tucked away in a purse. Or popped into a pocket.

1853 Proof Pair N&V 3 August 2017

1853 Proof Sovereign and 1853 Proof Half Sovereign. Unique in private hands.


Why were proofs struck in this era?

In the 19th and 20th centuries, the Australian mints crafted gold proofs as representative examples of those sovereigns and half sovereigns they were striking for circulation.

It is also noted that proofs were struck in those years where circulating coinage was never issued (even though the dies had been prepared).

In this case, proofs were struck as a record of ‘what might have been’.

 

Proof sovereigns and half sovereigns were struck to be preserved in government archives as a record of Australia’s coining history, time-capsuled for future generations.

Proof coins were also used to showcase a mint’s coining skills, to display at major worldwide Exhibitions or being sent to other mint’s and public institutions. A simple case of competitive one-up-man ship. (The British Museum was a major recipient of Australia’s gold proof coinage. So too the Royal Mint London). 


Were there any rules regarding the striking of proofs? How often? And the mintages?

The Sydney, Melbourne and Perth Mints were established as branches of the Royal Mint in London. And the three mints followed the protocols of the Royal Mint in striking proof coins.

Proof coins were struck at the discretion of the mint master so there was no hard-fast rule about the regularity of the issues. Or the mintages.

The striking of proofs was very often influenced by the collecting zeal of the mint master. And his involvement with the collector market. The more passionate the collecting habits of the mint master, the greater the chance of proofs being struck.

The prime role of the mints was to convert gold into circulating coinage; the striking of proofs outside those parameters.

 

Given that proof coining was also a very labour intensive process and time consuming, minimal numbers of proofs were struck.  

1893 Proof Half Sovereign OBV N&V 3 August 2017

1893 Melbourne Mint Proof Sovereign, obverse. 


Did collectors have access to proofs?

Proofs out of this era were not struck for the broader collector market per se.

In the main, they were struck for Government archives. Or retained within minting circles.

That proofs have come out of archives into collector's hands simply reflects a mint’s budgetary consideration of selling off surplus coins to fund up new acquisitions. 

It is noted there were a few years in which private collectors financed the striking of proofs for their own personal collections.

It is acknowledged that British collector John G. Murdoch financed the striking of gold proofs at the Melbourne Mint during the 1890s. There were times when proofs might also be struck for colleagues of the mint master. 


The availability of proof gold in today's collector market.

Leading numismatist and now retired dealer, Barrie Winsor, completed an extensive study almost a decade ago on the availability of gold proofs and determined what he considered to be the maximum number of gold proofs available to collectors.

Coinworks worked with Barrie to review and update his research and this is presented in the following charts:

It is noted that while mint records indicate the striking of gold proofs in several years, their existence is questioned. According to Winsor, they have never been sighted on the open market nor is there a record of a private sale having occurred. The above charts record those instances with the word 'unsighted’. 

It is estimated that there are a maximum 107 gold proof sovereigns available to collectors, covering the complete spectrum of dates from 1853 to 1931. (Compare that to our industry yardstick the 1930 Penny where 1500 to 2000 are believed to exist).

In terms of half sovereigns, it is estimated that there is a maximum of 85 proof examples available to collectors covering the spectrum of dates between 1853 to 1911.

Natural attrition has taken its toll on coins out of the original mintages with some of them filtering their way into circulation or being mishandled and thus having their quality marred.

The 1855 Sydney Mint Proof Half Sovereign is known by three examples, one of which has circulated. So suddenly three proofs have been reduced to two for the buyer that focuses on quality.

It is a statement of fact that proof gold, irrespective of the sector, is extremely rare and buying opportunities will always be thin on the ground.

But there is another consideration. Great coins tend to be held. The Spalding family held onto their gold proofs for more than forty years: the owner of the Madrid Collection held onto his proofs for more than twenty. So too Tom Hadley in the formation of the Quartermaster Collection.


So, which sector is the rarest? And should I wait for the rarest to become available?

While it is obvious that some design types appear to be more ‘readily available’ than others, there is no implication that they are popping up every year. As professionals we can wait years to be in a position of offering a single proof gold coin.

Extreme rarity is the key word when discussing proof gold.

It’s also obvious that the rarer the sector, the greater the financial outlay. Rarity ultimately determines the sector’s price structure.

A Sydney Mint Type I Proof Gold Sovereign (1853 – 1856) is a $350,000 to $1,000,000 proposition, with the unique 1853 Proof Sovereign valued at the million-dollar level. A Sydney Mint Type II Proof Gold Sovereign (1857 – 1870) is a $125,000 to $500,000 item. A Veiled Head Proof Gold Sovereign is priced between $80,000 and $125,000. 

There is a big difference. Not necessarily in their potential. But the capital outlay required of the buyer.

Because both coins, the Sydney Mint Proof and the Veiled Head Proof (subject to the price paid) will enjoy capital growth.

In our view the availability of a gold proof coin (OF ANY YEAR) is an opportunity.

If you happen to be offered one of exceptional rarity then the opportunity is even more profound.


The Australian Sovereign and Half Sovereign Series by design types.

The Australian Sovereign series ran from 1855 to 1931 and during this time eight different portraits were used, five of Queen Victoria, one of Edward VII and two of George V.

Two different reverse designs appeared during the Young Head design era (1871 – 1887), the St George & Dragon design and the Shield design.

Which means that there are nine different design combinations (or design types) in the Sovereign series.

The Australian Half Sovereign series ran from 1855 to 1918 and during this time seven different portraits were used, five of Queen Victoria, one of Edward VII and one of George V.

Which means that there are seven different design combinations (or design types) in the Half Sovereign series.

Reference is made in the above text to the 1853 Proof Sovereign (and 1853 Proof Half Sovereign). While Australia issued its first circulating sovereign and half sovereign in 1855, test pieces of the design were prepared at the Royal Mint London in 1853. Those test pieces were struck to proof quality.

One pair is held in the British Museum and another in the Royal Mint Wales. One pair is held in private hands.

Australian Sovereign Design Types 1855 - 1931

  1. Queen Victoria Sydney Mint Type I (1855 – 1856)
  2. Queen Victoria Sydney Mint Type II (1857 – 1870)
  3. Queen Victoria Young Head Shield (1871 – 1887)
  4. Queen Victoria Young Head St George (1871 – 1887)
  5. Queen Victoria Jubilee (1887 – 1893)
  6. Queen Victoria Veiled Head (1893 – 1901)
  7. King Edward VII (1902 – 1910)
  8. King George V Large Head (1911 – 1928)
  9. King George V Small Head (1929 – 1931) 

Australian Half Sovereign Design Types 1855 - 1918

  1. Queen Victoria Sydney Mint Type I (1855 – 1856)
  2. Queen Victoria Sydney Mint Type II (1857 – 1870)
  3. Queen Victoria Young Head Shield (1871 – 1887)
  4. Queen Victoria Jubilee (1887 – 1893)
  5. Queen Victoria Veiled Head (1893 – 1901)
  6. King Edward VII (1902 – 1910)
  7. King George V Large Head (1911 – 1918) 

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