Gold's Wild Ride Leaves London's Historic Jewellery Quarter Reeling
London's historic Hatton Garden, the epicentre of the UK's jewellery trade, is grappling with the aftershocks of a gold and silver price rollercoaster that has upended business and personal finances alike.
For weeks, the district was inundated as record-high prices for precious metals triggered a scramble. Families emptied attics of forgotten heirlooms, workshops meticulously collected every metal shaving, and retailers considered melting down stock. The boom, driven by investor flight to safe-haven assets amid political uncertainty surrounding the US Federal Reserve, created a frenzied selling spree.
"It was unprecedented," says Rachel Smith of Hatton Jewels. "We saw people parting with family pieces they'd held for generations, convinced it was the right financial moment. The sentiment shifted almost overnight."
The catalyst for the reversal came last Friday with the appointment of a new Fed chairman, perceived as a stabilising force. Markets breathed a sigh of relief, and prices tumbled—gold down roughly 13%, silver by about 33%. The whiplash has left the entire supply chain, from high-street jewellers to scrap merchants, facing steep losses on recently acquired inventory.
"We're supporting an industry sitting on millions in devalued metal," explains Gary Williams of scrap merchant Presman Mastermelt, a key processor for Hatton Garden. "The refiners are overwhelmed. The influx was staggering, and now we're all managing the downside."
The volatility exposes a complex reality: soaring prices aren't an unalloyed good for the trade. While selling scrap became lucrative, input costs for manufacturers skyrocketed, and retail customers postponed purchases. The sector now faces a cash flow crunch and the challenge of re-pricing stock in a falling market.
Despite the correction, perspective is key. Peter Kenyon, CEO of pawnbroker Ramsdens, notes, "The nine-carat gold price is still around £40 per gram today. It was £33 at the start of the year and averaged £28 last year. We've seen a pullback, but we are operating at historically elevated levels."
Expert Commentary:
Marcus Thorne, Financial Analyst at Lombard Street Research: "This episode underscores Hatton Garden's role as a real-world barometer for global macro sentiment. The district's turmoil is a direct consequence of shifting expectations around US monetary policy. While painful, such volatility creates arbitrage opportunities for sophisticated traders."
Eleanor Vance, Third-Generation Hatton Garden Jeweller: "It's heartbreaking. We've built relationships over decades, and now we're advising clients who sold cherished pieces at what seemed a peak, only to see the market drop. It feels like a betrayal of trust by forces far beyond our control."
David Chen, Commodities Hedge Fund Manager: "The narrative that high prices are universally beneficial is naive. This volatility disrupts planning, destroys inventory value, and punishes small businesses. The Fed's communication—or lack thereof—has real victims on the ground in places like Hatton Garden."
Sarah Prentiss, Ethical Jewellery Advocate: "Perhaps this is a moment for reflection. This frenzy over melting down history for cash highlights a disposable mindset. Where is the value in craftsmanship and sentiment? The market's gyrations are a symptom of a deeper short-termism."