Silly Putty is great for making weird fart noises and copying newsprint, but you know what it can't do? Swallow metal. While you can buy magnetic putty online, you can also make it at home with this . (There's also a much more specific here.) The process is simple, though you'll want to wear some gloves to do it.
All you need is some Silly Putty or a generic equivalent and black iron oxide, available in art supply stores. The putty has to be worked over a little first to give it a nice soft feeling. Add about a teaspoon to the 0.8 ounce putty, and mix it in with gloved hands on a surface you don't particularly care about (this is a paint dye, after all.) From there, get a nice magnet and play around with the stuff, watching it respond to magnetic fields.