The General Services Administration auctioned 209,834 troy ounces of fine silver yesterday ranging from $41 to $44 an ounce. The buyer was Mocatta Metals of New York. A small bar and some granules went for $36.41 an ounce.
The highest bid for a single gold bar weighing 256.7 ounces was $627.70 an ounce. The GSA rejected the offer as too low. Gold closed at $744 an ounce yesterday in New York.
A GSA spokesman said the reason there was little interest in the gold was due to the size of the bar -- too small for industrial users and too large for individual investors. Even at the unacceptable price of $627.70, its total value is $161,129.
The sale was made on behalf of the Veterans Administration as part of its long-standing program to reclaim gold from laboratory operations and silver from exposed film. The proceeds of $8.9 million will be used by the VA to purchase new materials.
The spokesman said the GSA has been conducting "salvage" sales several times a year for the VA and the Defense Department for a number of years. However, they never attracted any attention when the prices of the metals were lower.
He stressed that yesterday's sale in no way meant that the U.S. government was selling off silver from its stockpile of essential materials.