Diamond District gripped by turmoil as gold and silver crash

Silver and gold blew through Manhattan’s Diamond District this week and left dealers guessing prices by feel instead of screens. It was Thursday at noon on West 47th Street. Shops were packed. Phones kept ringing.

Dealers stared at metal they could not price. Prices had been rallying for months, as Cryptopolitan reported live daily, but then things turned violent.

By late Wednesday, silver and gold were at record highs after huge one day gains. Early Thursday morning, both fell close to 10 percent in about half an hour.

By the afternoon, prices bounced back. The calm did not last. On Friday, markets dropped again after President Donald Trump named Kevin Warsh as the next Federal Reserve chair. Silver fell more than 25 percent in a single day, the biggest drop ever recorded.

Dealers halt buying as prices swing and cash vanishes

“Yesterday I went to go sell my gold and it’s literally pandemonium at the refineries,” Moses The Jeweler allegedly said from inside his sleek store, wearing layers of jewelry and standing with several young men dressed the same way. Like most people on the block, he declined to give his full name.

“Prices have gone ballistic. The guys melting stuff down are running out of physical money. They bought too much and now everyone is panic selling.”

The last week turned safe haven metals into short term bets. Investors of all sizes piled into silver and gold as inflation worries stayed hot and Trump’s policy decisions shook confidence in the dollar. That rush fed wild price changes. For dealers on thin margins, the risk was immediate. On Thursday, at least three large refineries on Jewelers’ Row stopped buying metal from sellers.

“This is super recent as of this week,” said Micky, who has worked at TraxNYC for six years. “A lot of places aren’t buying because they’re scared they’ll take in gold at a high price and then it dips. The same goes for silver.” He said refineries depend on volume. A drop of around 10 percent in one morning can wipe out profits.

Outside, the freeze reached street level. Three 17 year olds tried to sell three silver coins that were 90 percent pure for $250 total. Nobody wanted them. “I found them in my jar and thought why not,” Andrew said. “We’ve had no luck so far. It’s not the time in the market. No one’s refining silver.”

Buyers hedge, rumors spread, and silver draws the crowd

Inside Modern Exchange, the air smelled like solder. Alex said he was carrying $10,000 in cash to buy gold coins as protection against Trump’s plan to weaken the dollar.

“For 20 or 30 years we were buying from China and adding debt,” he said. “If the dollar gets weaker and gold goes up, the metal in the vault helps reduce that burden.” He said he believes gold could reach $8,000 by March.

According to FT’s survey, talks along the block drifted into rumors. Some blamed foreign governments. Others pointed at hedge funds gaming global markets. Shop owners said customers from all backgrounds were buying or selling because of wars in Ukraine and the Middle East and fears of economic chaos in the US. Cryptocurrency never came up.

Silver stole the spotlight. Bernie, a dealer calling out to passers by in the cold, said demand jumped after the US labeled silver a critical mineral late last year and after news of a fast charging silver carbon EV battery. “I remember when silver was $19 an ounce,” Bernie said. “People laughed at me. I saw the charts.” He listed uses in AI systems, medicine, and weapons and said none of it works without large amounts of silver.

At Benny’s Jewelry, manager Yoni said rising prices pushed regular buyers out. “Business is OK. It’s not great,” he said while handling a loupe and answering calls. “Gold is high and not everyone can afford it. Lab diamonds are everywhere. Watch prices are rising. Everything is a risk. We just try to buy right.”

Back at Moses Jewelry, the mood lifted by early afternoon. Teenagers packed the store to stare at gold bars behind glass. “These are insane times,” Moses said. “Right now, people want metal.”

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