Episode 7 of "Sherlock & Daughter" unfolds with the culmination of the trap meticulously laid by Holmes and Amelia for the enigmatic Red Thread. A clandestine phone call from Whitlock, intercepted by Holmes and Detective Swann through their eavesdropping device at the Duchess of Lincolnshire's mansion, unveils the next chapter of the hostage drama – their imminent transfer to the Duke of Leicester’s abode.
Sherlock swiftly dispatches a verdant, followed by a golden signal into the azure sky, serving as a covert communiqué to his allies. As two carriages depart from the duchess's residence, bound for the duke's, Holmes' team anticipationly closes in, surrounding the conveyances from every conceivable angle. The driver, sensing impending capture, flees, leaving behind a deeply sedated Watson and Mrs. Hudson, who are swiftly rescued. In his delirious state, Watson murmurs to Holmes about the perpetrators' scheme to pilfer from the hallowed halls of the Bank of England.
Elsewhere, Lady Violet storms the American ambassador's residence like a tempest, demanding an audience despite Paul's absence. Her impatience knows no bounds, and she even places a call to Inspector Whitlock, ordering him to eliminate Amelia from the equation.
Meanwhile, Amelia infiltrates Clara's bedroom, whispering the shocking revelation that Lady Violet orchestrated her abduction. When the ambassador finally arrives, Amelia and Clara eavesdrop on a conversation filled with intrigue, uncovering a partnership riddled with discord. Their grand design involves auctioning a weapon based on Amelia's mother's designs during Clara's ball. The ambassador, however, defends Lady Violet's assurance that no lives would be lost. The narrative deepens as it transpires that Lady Violet not only orchestrated Clara's kidnapping to procure the ambassador's keys but now seeks Amelia's and Dan Moriarty's removal as well.
As Amelia steps out of her house, her eyes fall upon Detective Swann, who, having overheard Violet's menacing threats over the phone, has come to her rescue. Deeply concerned for Dan's wellbeing, Amelia persuades Swann to escort her to his workplace. Meanwhile, Holmes turns his attention to the audacious theft of gold from the Bank of England. Inspector Whitlock reveals that a consignment of South African gold has recently been transported from the docks to the bank.
Holmes, accompanied by Inspectors Whitlock and Bullivant, makes his way to the bank. Whitlock insists on bringing along a photographer and a reporter for documentation. The bank manager guides them to the vault, which is filled with gleaming gold bars. However, Sherlock swiftly uncovers that every single bar is a meticulously crafted counterfeit.
Through his keen deduction, Holmes realizes that the coachmen have once again played a pivotal role. During the transfer, they cleverly loaded the genuine gold into the carriage's hidden compartments and substituted them with the fakes. He further ponders that solving this crime was unusually straightforward, leading him to wonder if the Red Thread deliberately left clues for him to discover.
Simultaneously, at the stock exchange, Amelia and Swann rush to warn Dan of the impending peril. News of the fake gold in the bank begins to spread like wildfire, causing chaos as the market plummets into turmoil. Amelia then rejoins Holmes, who reveals to her that the ambassador's jewels were actually a bribe intended for Inspector Whitlock.
As they deliberate on the situation, they conclude that the Red Thread has been intentionally feeding them clues all along. The golden screw they found in one of the carriages at the coffin factory emerges as yet another of these hints. Holmes elucidates that the burning of the factory by Weams and Maggot was not part of the Red Thread's plan, which is why they met their untimely demise. This clue indicates that the genuine gold is being held at the coffin factory.
Holmes enlists Detective Swann, and they embark on a mission to the coffin factory. Upon their arrival, they discover the place heavily fortified with guards. Amelia cleverly draws the guards inside, paving the way for Sherlock to encircle them with the assistance of Detective Bertie and Clarence, the proprietor of the carriage workshop. The gold is successfully retrieved, but post this triumph, Sherlock confides in Watson, revealing that the Red Thread has designs on something far more ambitious.
Amelia then presents Holmes with the evening newspaper, detailing how the American ambassador had purportedly saved the nation by bringing in "investors" — who are revealed to be members of the Red Thread — to acquire shares in the Bank of England. With the gold now in their possession, the Red Thread wields considerable financial might and influence.
Suspicion begins to fall heavily on Dan Moriarty for Holmes. He recollects how Dan had thwarted Amelia's kidnapping, thereby enabling Holmes to scrutinize the carriage and uncover the concealed compartment — a pivotal discovery that expedited the resolution of the missing gold mystery.
Behind bars, Dan confronts his father, confessing to him that he is the mastermind orchestrating the entire scheme. He is, in fact, the Red Thread. Leveraging his father's criminal network to amass funds, Dan invested them in the Bank of England during the market collapse. His grander aspiration is to harness his organization to dismantle the empire and liberate Britain's colonies. He possesses a weapon and intends to ignite a war against all nations that oppress their people.
Professor Moriarty is taken aback and disagrees vehemently with his son's extreme views. His philosophy is to corrupt the empire and exploit it, rather than obliterate it entirely. He further realizes that Dan had been plotting to facilitate his father's escape and subsequently frame him as the mastermind. The father and son engage in a heated debate, ultimately parting ways on acrimonious terms in the climax of Sherlock & Daughter Episode 7.
