Old medal covers instrument (4)
I believe the answer is:
oboe
'instrument' is the definition.
(oboe is a kind of instrument)
'old medal covers' is the wordplay.
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'medal' becomes 'obe'.
'covers' means one lot of letters goes inside another.
'o' placed into 'obe' is 'OBOE'.
(Other definitions for oboe that I've seen before include "Double-reed wind instrument" , "Reed instrument" , "blow it!" , "Instrument used in 1d" , "Woodwind instrument of treble pitch" .)