Gold and silver tumult triggers ‘pandemonium’ in New York’s Diamond District
Volatility of precious metals presents risks and big rewards for Manhattan’s no-nonsense jewellers
George Steer in New York
It is noon on Thursday in Manhattan’s Diamond District and dealer turned social media influencer “Moses The Jeweler” can only guess at how much the gold bars in his hands or the silver rings on his fingers might be worth.
Prices for the two precious metals have surged in recent months and swung dramatically all week.
By late on Wednesday, gold and silver were trading at record highs, fresh from huge one-day gains.
On Thursday morning they both crashed almost 10 per cent in the space of 30 minutes before rebounding in the afternoon.
By Friday, prices were in freefall again as traders digested Donald Trump’s decision to nominate former Wall Street executive Kevin Warsh as Federal Reserve chair, with silver plunging more than 25 per cent in its biggest ever daily decline.
“Yesterday I went to go sell my gold and it’s literally pandemonium at the refineries,” said Moses from behind the counter of his sleek West 47th Street store, wearing enough bling to sink a small ship and flanked by half a dozen similarly bejewelled young men.
Like Moses, most of the people who spoke with the FT declined to give their full names.
“Prices have gone ballistic,” he added.
“The guys melting stuff down are all running out of physical money.
They’ve been buying too much, everyone’s been panic selling.”
Investors big and small have piled into gold and silver in recent months, transforming the haven assets into instruments of speculation as worries over simmering inflation in the US and Trump’s capricious policymaking at home and abroad combine to undermine the dollar.
Extreme price swings over the past week translate into extreme uncertainty for the hundreds of no-nonsense gold and silver dealers plying their trade on New York’s frenetic Jewelers’ Row, where at least three large refineries had on Thursday taken the unusual step of closing to sellers.
“This is super recent as of this week, a lot of places aren’t buying in the fear that they’re going to take in all this gold at such a high price and it’s going to dip and they’re going to take a loss.
The same goes for silver,” said Micky, a dealer who has worked at TraxNYC for six years.
Marcus, left, and Micky at TraxNYC © George Steer/Financial Times“These refineries and bullion places work on such thin margins, it’s all about volume,” he added.
“A drop like today of about 10 per cent almost since the morning puts them at a real risk of losing money.”
Down the street, a group of 17-year-old truants looking to sell three 90 per cent silver coins for a total of $250 told the FT that no one wanted to buy.
“I found them in my jar and thought why not,” said Andrew.
“We’ve had no luck so far.
It’s not the time in the market, apparently.
No one’s refining silver.”
At the back of Modern Exchange, a low-ceilinged jeweller filled with the musky smell of solder, Alex, originally from Poland, says he is carrying $10,000 in cash to buy gold coins as a “hedge against Trump’s policy to make the dollar weaker”.
“For 20 or 30 years we were only buying from China and making more debt and more debt.
Trump wants to take care of this.
If we make the dollar weaker and the gold goes up, we have lots of gold in the vaults so our debt will be either lower or erased,” he said.
“By March I think gold will be $8,000.”
Conspiracy theories abound about foreign governments and nefarious hedge funds spoofing international markets.
Shopkeepers say clients from every walk of life are either cashing in or being driven to sell by worries about wars in Ukraine and the Middle East and a sense of impending economic chaos in the US.
Not once do cryptocurrencies come up in conversation.
Silver is currently the hottest market, according to Bernie, a dealer hailing down passers-by in the frigid winter air.
He blames rising prices on the US having classified the metal as a critical mineral late last year and the release of a fast-charging silver-carbon EV battery.
Bernie said he was mocked for buying silver when it was trading at $19 per troy ounce © George Steer/Financial Times“I remember when [silver] was $19 an ounce, and I was buying and I was getting laughed at.
I mean literally laughed at, and they told me I’m wasting my time.
But I saw the charts,” Bernie said.
“You cannot have AI without silver.
It’s the number one conductor of electricity in the world.
It’s used for medicine.
You want a tomahawk missile?
Find me a couple of hundred ounces of silver.”
At Benny’s Jewelry, store manager Yoni says profits have suffered as regular buyers of both gold and silver have been slowly priced out.
“Business is OK, it’s not great like how some people might imagine,” he said, juggling a ringing phone and a jeweller’s loupe.
“Gold is high, not everyone can afford it.
Now you’ve got lab diamonds, plus watch prices are going up.
In volatile times it’s all a risk, a gamble.
We just have to buy right.”
The mood is brighter back at Moses Jewelry, which by early afternoon is packed full of teenage boys craning to get a glimpse of the gold bars on display.
“These are some insane, crazy times we’re living in,” Moses said.
“But I’ll tell you one thing — right now you got to be in the metal game.”
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