I have found the rare earth magnets at Hobby Lobby, seems like some of them were 3/4" diameter, and I remember seeing strips also. Inlay them bit and use epoxy. I have used some of them in my boxes to keep things closed.
Now if you could find a long rod, drill out the center and install so just the ends are showing, or even use a wood plug to cover the end (that would look better). Just need one strong enough so it penetrates the wood.
Agreed that would be a sharp look rack.