100oz vs. 1oz

[silverstacker]

Recently I was at my LCS and we were discussing the market and the topic of 100 oz bars came up. He told me that he is currently buying 100 oz bars at 97% spot. This amazed me because he is buying 1-5-10 oz at full 100% spot. Even if the 100 oz bar is Engelhard or JM he is still buying at 97% and the reason he gave is that when he wholesales these large bars he isnt able to fetch enough money that he used to in the past. He also stated that he can buy 100oz bars at almost spot. However, all the rest he is paying full spot for even $2 over spot for 1oz Engelhards.

Anyone else run into this or have heard from their source about the over abundance of 100 oz bars and not fetching full spot prices?

This amazed me.

[misteroman]

100 oz are hard to sell as well.
Also factor in the fact that they can be faked easier it seems and they are just tough sells. The last 100 oz ones I bought had the receipt from 98 when they were purchased and were in the guys name as well so I felt comfortable buying them.
Just my take on it

[Silverfondler]

If you are buying 100oz bars you are buying for investment - generally one would think. You are not looking to flip these bars anywhere. More to hold them for time. Whereas 1oz bars or smaller portion bars rather (10,5,1) are easier to move. Not to mention almost anyone can buy them at anytime.

[natsb88]

You will pay less over spot to get it, and you will get less over spot (or often under spot) when you sell it.

There is a lot less work for a refiner/mint to make a single 100oz bar than there is in making a hundred 1oz bars, so even hot off the press they sell at a lower premium per ounce. But the bigger the bar, the smaller the retail market. It's easy to find 10 guys willing to buy 10 ounces each. It's not as easy to find one guy willing to buy 100 ounces. So the premium is lower, but so is the liquidity.

[Shazbot57]

I agree, 100 ounce bars seem to take longer to sell. A LCS here has 3-100 ounce bars (all older Engelhards, two scratched up pretty well but intact) that have been sitting in their case/safe for many months, but they turn over thouusands of 1, 5 & 10 ounce bars weekly. One & 10 ounce bars/ingots IMHO are the way to go - all things being close to equal, & considering you may want to sell someday easily. Remember, If the shtf, and I mean truly hits the propeller, the dealers may be heading for parts unknown shortly thereafter, and liquidity will be at a premium. I would want to have smaller units easily tradeable or useable. Just my 2c worth.

[Know Common Cents]

I agree with these posts. I know a trio of rather prominent LCS owners who won't touch 100 ouncers at all now. They say the fakes are so good now (many originating in China) they don't even trust their own instincts anymore. One said there's been discussion about certification of these 100 oz bars. IMHO, they're too bulky to be sending back and forth to a third party who'll guarantee the integrity of these bars.

Another says he won't purchase (or re-purchase) 100 oz bars from unknown sources. He buys new stock direct from the refiner and only buys back the ones he's sold before. He feels comfortable doing this as he takes a pic of each 100 oz bar coming in and going out of inventory. For those without a serial number, he's developed his own "chop mark" for the plastic sleeve the generics come in.

Seems like a lot of extra work and worry having these 100 oz mammoths. Give me 5s and 10s and, especially, the single ouncers that'll trade or barter much more easily.

[dakota1955]

I guess I'm a bit different from most. I like to have a few 100 oz bars because they are the cheapest per oz. I plan to keep them as the core holding and add 90% and smaller bars also. When shtf and price go up a person still will get a great return.

[Shazbot57]

All valid thoughts... but consider these thoughts: I think you may find if the shtf, FRN's may be virtually worthless, if not totally worthless and at $50-$100 per oz or more, that 100 oz bar may be hard to find a buyer for at $5000-$10,000+. And why would you want those FRN's if the spam hit the fan? I'd rather have 100 one ounce bars worth $50-$100 each that I can trade for gas or groceries, or ???, rather than one large bar for which I have to find a buyer. Sure, maybe you could use it to buy a car, MAYBE. Worse yet compete with a hoard of people all trying to cash in their stacks at the same time. Consider something else. When someone sells, someone else has to be willing to buy. Will dealers be willing to buy massive amounts of PM's at the top of the price range when everything goes beserk? Only if they think they can move it for a still higher price. And what would they rather buy, small easily sold items or large hard to sell items. It's like musical chairs. No one wants to be standing when the music stops! Just my 2c worth.

[Hawkeye]

For me, it's not even an issue. I don't have $2000+ at a time to spend on pms at this point in my life. However, I looked them up on Provident, and for the price of 1 100 oz bar ($2,093), you could get about 96 1 oz bars/rounds. Which would I rather have? I don't know, but it's an interesting question.

[christostock]

Well,
silver went up to almost $50 per ounce a couple years ago and the 100 oz bars were being bought and sold the same as now with lower spot price. silver eagle were being bought and sold as well.
100's I was buying at spot minus 60 cents and selling to dealers at spot minus 10 cents.
So there will always be buyers and sellers no matter what the spot price is.
Easy to sell? yes if you know the right person to call!
Easy to buy? People were willing to sell at spot minus 2-5$ per ounce when silver was sky high.
most pawn shops and we buy gold shops know that and were telling people, here is my price, take it or leave it.
the sellers were only looking at how much profit they scored since the time they purchased.
Most sellers were looking at 2000 - 3000$ profit per 100 oz bar and the price of gas and milk was not skyrocketing with the price of metal.