Gold coins

Every day on television and in newspapers the value of gold is reported – in US dollars. Generally, when there is an international crisis the value of gold rises. Its value as an industrial material (gold is used in electronics and jewellery) should reflect industrial activity, but for thousands of years gold has played a role in money, and the price changes we see today reflect that old function. Gold remains a material that people believe stores wealth.

1855 Sydney Mint Gold Sovereign (obverse)

1855 Sydney Mint Gold Sovereign (obverse)
Photographer: Jon Augier / Source: Museum Victoria

Modern Gold Coins

Australian mints still strike gold coins. They are not made for circulation, but to sell to people who want to have some of their wealth stored in gold or who want gold in their coin collection. Such coins are sold at a price above their gold value and usually well above their denomination. One coin for example has a face value of $50, contains about $300 gold value and is retailed for about $320. Since 1980 Australia has issued gold coins with face values between $5 and $3000.

Such coins are a modern phenomenon. In the past, coins were made to circulate and the fear was that they would not contain gold to match their denomination. When the First Fleet arrived in Australia, coins both in silver and gold contained their face value in metal. The system at that time was failing, as the relative values of gold and silver metals often changed. In 1816 the British introduced a new gold coin, the sovereign, and new metal content for their silver. The sovereign, worth one pound, contained a pound worth of gold, while the new silver coins contained just enough silver to deter forgery. When gold was discovered in Australia these coins were used.

1855 Sydney Mint Gold Sovereign (reverse)

1855 Sydney Mint Gold Sovereign (reverse)
Photographer: Jon Augier / Source: Museum Victoria

Between 1855 and 1870 Australia also had its own gold sovereigns. They were made at the Sydney Mint and featured the word AUSTRALIA within a wreath as their reverse design. Even though they were made in Australia, they were not legal in any Australian colony until each colony proclaimed them legal tender. Victoria, which wanted a mint of its own, was one of the last colonies to accept the Sydney coins. From 1871 until the last issue in 1931, the gold sovereigns made in Australia were British sovereigns. They were identical in almost every way; only a tiny letter, called a mintmark, differentiated the issues of different mints. Indeed, the three mints in Australia, in Sydney, Melbourne and Perth, were branches of the Royal Mint in London, not Australian mints at all.

Coining Room, Royal Mint, Melbourne, 1899

Coining Room, Royal Mint, Melbourne, 1899
Source: Museum Victoria

The change to British sovereigns was to coincide with the opening of the Melbourne Mint but there was a delay and Sydney was the first to issue the new coins. All the dies for striking the coins were sent from London and samples of every production were sent back to London for testing. Any variation from the standard, even the use of dies with old dates, brought down London’s wrath. The Australian mints were justifiably proud of their work and advanced world standards in purification of gold through new chemical operations.

Paper Money and Gold Coins

The gold coins were legal tender to any amount, although paper money was often more handy. Early paper money however had to be guaranteed in gold.  The first Australian notes bore statements like: “The Treasurer of the Commonwealth of Australia promises to pay the Bearer One Pound in gold coin on demand”.

Gold Coins and Wear

Sovereigns were only legal until they started to show wear. Then they were withdrawn and replaced with new full weight coin at the cost of the British government. Half sovereigns, although technically covered by the same legislation, were used more often and so wore more quickly, making withdrawal too expensive. Production of half sovereigns was to be avoided by the mints if possible.

To have your gold turned into coin was a simple matter; you took it to the mint and came back a few days later to collect the coins. In London the government absorbed the costs of assay, purification, alloying and striking, but in Australia a small charge was made.

The Gold Standard

The “Gold Standard” was a complex international arrangement, elements of which set the value of nations’ currency as a specific amount of gold and guaranteed to accept gold bullion and coin. It really only became fully achievable with the great nineteenth century gold discoveries in Australia, North America and Russia. Although the economic turmoil of the First World War ended the arrangement, efforts to get it going again continued into the early 1930s. Australia went on striking gold coin throughout the 1920s even though most of the coins were melted soon after leaving the country. The last issues were made in 1931 from Melbourne and Perth (The Sydney Mint had closed in 1926).

In addition to the millions of gold coins made for circulation, the Australian mints also made some very rare coins for presentation purposes. These included five and two pound coins from the Sydney mint in 1887 (for Queen Victoria’s Jubilee) and 1902 (for King Edward VII's coronation). There were also coins produced with mirror-like fields (called proofs) made for presentation to VIPs, museums and for collectors.


Please note: Museum Victoria DOES NOT provide valuations and cannot tell you how much your object is worth. Please read our valuations infosheet for further advice. We will not publish or respond to comments asking us to value an object.

Comments (15)

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john holm 6 September, 2009 15:02
hi i have a gold coin dated 1887 with dragon on one side with queen victoria on the other side with the words I M OF A SOVEREIGN any ideas what this coin is .thankyou john holm
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Discovery Centre 7 September, 2009 15:02

Thanks John for your query. We have passed this on to one of our resident experts in numismatics for them to identify the coin. Watch this space!

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Discovery Centre 17 September, 2009 15:25

Hello again, John. Our expert was able to confirm that the Standard Catalogue of World Coins includes several items depicting Victoria and St. George; however, none of these have the word "sovereign" on them. This may indicate that your coin is a copy, although it is hard to be definitive about such things! We hope that this information is useful to you.  

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paul oneill 20 October, 2009 00:36
have a gold sovereign date 1910 with edward dvs vii set in a ring any idea whats the best way to sell it and how much its worth
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Discovery Centre 21 October, 2009 11:40

Hi Paul and thanks for your query. Whilst Museum Victoria cannot provide valuations of objects the following list of Approved Valuers may be of assistance. You may also be interested in contacting the Numismatic Association of Victoria or an independent numismatics company such as Noble Numismatics for further information about your coin.

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adam 19 December, 2009 04:01
ihave 300 years old gold coin and i wana sell it can how i know how and wer can i do that?
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Discovery Centre 21 December, 2009 11:26

Hi Adam,

Unfortunately Museum Victoria cannot provide valuations of objects. Please see our Question of the Week information on obtaining valuations of coins. http://museumvictoria.com.au/discoverycentre/discovery-centre-news/coin-valuations/

 

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Jhoanna 16 July, 2010 03:07
a diver friend of ours found 1887 jubilee head gold coins during one of his diving trips. on the coin stated VICTORIA D:G: BRITT:REG:F:D: How much does these coins cost? Or how are we going to know if these are genuine?
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Discovery Centre 16 July, 2010 13:46

Hi Jhoanna to find out the authenticity of the coins you will need to contact a numismatist. See the link to our Coin Valuations infosheet in the last paragraph of the article above.

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paul bradford 18 August, 2010 19:51
hi i have reserched a coin in my collection and discovered that a very few early type II sydney mint coins were produced and known as plain edged proofs in particular 1857 where there are three known examples according to bluesheet i have an 1866 sydney mint plain edge sovereign in my collection which always puzzled me would this be the only known example in the world with this anomily? a numismatic revelation? can you comfirm through your comprehensive archives if it is known if this is possible detailed photos are available upon request looking forward to your response kind regards paul
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Erica 21 February, 2011 16:28
Hi, I have a 1931 gold british saint george coin. On the back around it it says "Georgivs V D.G. BRITT:OMN:REX F.D. IND: IMP:" It is very interesting... could you tell me if it is valuable? or is the only thing thats different about it is that its gold and old? thanks
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Paul 2 September, 2011 02:40
Like John 6th Sept 2009, I too have a very small coin stamped IM of a Sovgn and dated 1887. However this was passed to me by my grandmother over 50 years ago and said to have been in my great grandfathers first pay packet. It therefore seems highly unlikely that this is a copy.
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Debbie 17 September, 2011 09:11
Hi I have a well worn double headed penny, with a left facing Victoria DG Britt:Reg F.D. on both sides. You can see the also very worn join on the outside rim. I'm guessing this was used to defraud people. Can you tell me anything more?
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Kelly Rogers 16 September, 2013 18:15
Oh. Thank you for the information. I was so glad to read your post since I learned a lot of facts about gold coins used in London and in Australia. And it's good to know that no money is charged when gold coins are sent to the London mint. However, a small fee is charged when in Australia. :)
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garry 15 July, 2014 20:03
Like Paul & John I also have a 1887 gold coin that is 13mm in diameter. Legend reads "IM Of 3 SOVGN L:CHR:LAUER" with Queen Victoria left facing with St George slaying the dragon on the other side. The woman that I bought it from, she was in her eighties, told me that it belonged to her grandmother. I cannot find any info on this coin, can you please help me.
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