Ok, so my buddy did something (potentially) stupid. He decided that the price of silver was going to go up, so he decided to buy 100 oz of silver. Nothing wrong with that, and in fact that would probably be one of the better things he’s spent his money on recently.
However rather than buy from a known and established silver dealer(?) he bought off of E-Bay. I guess the guy he bought from has sold other silver bars and coins in the past and has all sorts of good feedback.
So fast forward, he bought the bar, probably not getting much of a bargain and he recieves the bar today and things look fishy. The bar is a bit scratched up, but it does have a seal on it from EngelHard as well as a serial number. However it looks like it was cut with a regular metal saw. It looks uneven, and has some marks on it where the metal is burned and discolored. It also has some faint burned marks in the shape of a circle.
So… I’m not sure what to tell him. Are there any real ways to prove whether or not its real? What should he do?
Tell him to take it to a jeweler or a precious metals broker for appraisal. I have no idea how much that might cost, but they’ll certainly have the tools necessary to determine the authenticity of the bar.
Yeah, thats exactly what it looks like actually. So I guess I’m not as suspect of it as I was. It matches the size of what it should be, but the weight is a bit low, which could just be my scale.
Thanks samclem, since you have so much experience with these I have a few questions. Is it common for the older bars to have what looks like burn marks on it? The thing that made me the most suspicious is the circular marks on the back. I figure if someone was going to screw with it they would probably drill parts out fill it with some metal and recoat it. Which is kind of what this looks like. I can’t think of any other good explaination for those marks.
Also, where do (did) you buy your silver from? I don’t think my friend will be buying off Ebay in the near future, but if the urge should strike him in the future who would you reccommend?
On ebay it looks like between 1000 and 1250 dollars for 100 oz. On some metal trading website it looks like silver is going for $11.62/oz, so I guess if you can beat that, good on you.
We currently buy bars at 55 cents/ounce under the “spot” price. So, yesterday I bought them at about $11.10/ounce net to the customer. I can only ship my excess to the refinery and get a few cents under the “spot” price, so I’d be glad to sell one at about the “spot” price to a walk-in customer. Shipping is easier these days, especially for multiple bars, as the USPS invented a great box–“Flat rate box=$8.10 postage” Anything you can fit in only costs $8.10 shipping anywhere in US. Insurance or registration cost extra. So we ship 60 pound boxes for $8.10 postage. Wonderful.
Tell him to melt it down, cast it into bullets, and go shoot a werewolf: if the werewolf buys it, it’s kosher; if he gets his throat ripped out, it’s fake. Simple, really.
I bought five 100-ounze silver bars once. This was back in 1988. I made two mistakes from an investment standpoint. First of all, I took possession of them. Second, I had them sent to my local bank for me to pick up. My local bank was in Wilmette, Illinois. Too late I discovered that the bars were brought via armored truck from LaSalle bank in Chicago (the big one near the Board of Trade). I ended up having to pay $85 dollars per bar for the delivery, when I could simply have driven downtown to pick them up.
And because I took possession of the bars, they charged another hefty premium when I eventually sold them back. The reason may have something to do with the circular marks on your friend’s bar. I was told they had to drill holes in the bars to ensure that they were still all silver and that I hadn’t hollowed them out and filled them with a cheaper metal. All of that, combined with the fact that silver went from about $10 per ounce when I bought it, all the way down to about $3 per ounce when I sold it (thank you, Hunt brothers) meant that my foray into the precious metals side of investing was an expensive learning experience.
Actually, you made four mistakes from an investment standpoint.
You bought your silver at the absolute highest price it had reached between 1981-2005. Mistake one.
You sold your silver at $3/ounce. The absolute lowest price it achieved in that same period. What incredible timing you have.
Not that you were alone. Many investors get sucked into venues about which they have absolutely no knowledge. Commodities are treacherous.
The Hunt brothers invested in silver and manipulated the markets between 1971 and 1980. After that, they were out of the biz. They had nothing to do with your problem.
