100 oz Silver Bar Dilemma

[Silver_Stampede]

Hey all, I purchased a 100 oz Engelhard bar about 3 years ago, and now I am considering taking it into my local dealer and trading it in for 1 oz rounds. While it is nice to hold a 7 pound brick of silver in my hand, I greatly prefer divisibility and liquidity, not to mention avoiding any taxes in the future. My question is what do you guys think a fair trade would be for the bar? I know I am going to have to take a little loss but I think it is for the best. Lets assume I trade it for 1 oz generic rounds. I did some quick calculations, tell me what you think:

Lets assume $30/oz silver, so 100oz x 30 = $3000, sell price of ~$2950. Generic rounds buy price at ~$31.50 x 100 = 3150.
3150 - 2950 = $200 difference, which is around 6-7 ounces loss.

If I could trade it for 95 1 oz rounds would I be getting a great deal??
Thanks and I am glad to be a member of the forum!

[beauanderos]

Can you afford to buy one ounce rounds right now during this dip? Then sell the bar to APMEX in three months or so when the price has risen? You'll get the most value for your money that way if it worked.

[jasmatk]

I would try and sell it to a private buyer to avoid taking the loss then use the cash to buy the 1 oz rounds.But if you can get 95 oz from your dealer id say thats a fair deal.

[Lemon Thrower]

a $200 swing on $3000 is 6.7%. Agree 5% would be very reasonable and will be cheap insurance in the future in terms of liquidity and other considerations. A buck-fifty is a bit high for generic rounds; a dollar is fair generally and in this context i would try for 75 cents.

the difference between 6.7 and 5 percent is 50 bucks. you might be able to squeeze a few bucks if you went through some of the big online dealers but then you have shipping, insurance, and a lot of hassles and paperwork.

you might be able to trade with someone here. I did that a long time ago. Not sure if i had a name brand bar or generic, but i got generics back. santa claus, footprints in the sand, etc. a few good ones but mostly crap. of course, those crap rounds are market .999 fine one troy ounce so i came out ahead.

[Jonflyfish]

Hey all, I purchased a 100 oz Engelhard bar about 3 years ago, and now I am considering taking it into my local dealer and trading it in for 1 oz rounds. While it is nice to hold a 7 pound brick of silver in my hand, I greatly prefer divisibility and liquidity, not to mention avoiding any taxes in the future. My question is what do you guys think a fair trade would be for the bar? I know I am going to have to take a little loss but I think it is for the best. Lets assume I trade it for 1 oz generic rounds. I did some quick calculations, tell me what you think:

Lets assume $30/oz silver, so 100oz x 30 = $3000, sell price of ~$2950. Generic rounds buy price at ~$31.50 x 100 = 3150.
3150 - 2950 = $200 difference, which is around 6-7 ounces loss.

If I could trade it for 95 1 oz rounds would I be getting a great deal??
Thanks and I am glad to be a member of the forum!

Perhaps you are looking at this as a "loss" but it is not. The price of the bar is close to spot. Rounds are at a premium. You purchased a 100 oz bar. When you go to sell the bar, it is still 100 oz.
In your example, what you paid to purchase the 100 oz bar would only buy 93-94 rounds. Now, the bar is still worth 93-94 rounds. You can't buy the bar then expect to swap it for 100 rounds. There is no free arbitrage to "make" $200.

[Corsair]

Jon's got a point. When you bought the bar, you probably paid very close to spot for it, maybe a little over because it's Engelhard. But one ounce coins carried a premium then, and they carried a premium now. Just look at copper ounces. The price is crazy. But it in pounds or kilos, and you get a little closer to Earth. By "breaking up" your bar, you have to consider the premiums - and if you are able to make it out with 95 ounces, you did a great job.

[tbram88]

According to AMPEX http://www.apmex.com/Category/518/Silver_Bars_Secondary_Market__New.aspx you can get $2826 for your 100 oz. Engelhard bar.
and you can buy generic .999 in a random mix of sizes for $29.60 per oz.

29.60 * 95 = 2812 Shipping is probably a killer though

Bob.