Question about the silver 1000+ oz nominal bars

Weiss

I understand that commodities contracts are traded essentially sight-unseen and that theoretically there is a 1,000 oz LGD bar for each contract. Deliverable if executed properly with contracted delivery fees.

I thought I'd read a few years back that those bars were +/- 1,000 ounces and that their actual weight could be off by what seemed like a pretty significant % -- like maybe 5% or so either way. Maybe because getting a perfect 1,000 ounce weight is difficult in a larger industrial refining scenario.

LBMA org indicates that bars can weigh between 750 oz and 1100 oz, but they request they fall between 900 and 1050.
LBMA bar specs .pdf

I remember seeing a 980-something oz bar on eBay not too long ago. And now I notice that Apmex has Penoles bars that are 1000+. They all seem to be in the same range, roughly 50 oz over (1058, 1057, 1069). But the kicker is that they are charging for the overages. I think Tulving does the same.

It's not likely I'll shell out $14k for one bar, and I don't mind them charging. Silver is silver.

So my question is...

Do you suppose Apmex and others are taking delivery for contracted bars, rolling the dice as it were, and hoping for a significant overage? After all, the +69 oz bar I mentioned above comes out to $850+ worth of silver over 1,000 oz.

Or has technology finally caught up with LGD bars and now they trade for their actual content instead of an estimated 1,000 oz weight?

Peaceman

I'd think 1000oz bars are out of most people's reach. I show friends just one 100ozer and they go crazy on how much it cost... Sure Apmex would make a few extra dollars on overages and they deal with a lot of it... Who buys a 1000ozer? It's too hard to move on the open market?

roadrunner

I saw a 1000 oz bar at my local shop not long ago. It didn't last even a week. There's more demand than you think. If you're stockpiling thousands of ounces of silver, a single 1000 oz bar is certainly not going to hurt you.

roadrunner

SportsModerator

<< <i>I saw a 1000 oz bar at my local shop not long ago. It didn't last even a week. There's more demand than you think. If you're stockpiling thousands of ounces of silver, a single 1000 oz bar is certainly not going to hurt you.

roadrunner >>



Unless you try to lift it without bending your knees

CaptHenway

Weiss, if I understand your question correctly, you are asking about what happens to the odd weight if taking delivery.
.
If the bar they give you is over 1,000 ounces, you give them a check for the difference in value when you pick it up.
If the bar they give you is under 1,000 ounces, they give you a check for the difference in value when you pick it up.
.
I suppose that if you were a large commercial user, such as Kodak back when they made film out of silver, the differences would just be credited or debited to an account.
.
TD

Weiss

<< <i>Weiss, if I understand your question correctly, you are asking about what happens to the odd weight if taking delivery.
.
If the bar they give you is over 1,000 ounces, you give them a check for the difference in value when you pick it up.
If the bar they give you is under 1,000 ounces, they give you a check for the difference in value when you pick it up.
.
I suppose that if you were a large commercial user, such as Kodak back when they made film out of silver, the differences would just be credited or debited to an account.
.
TD >>



Ah. Thanks. That's what I was asking!