By Gregor Stuart Hunter
SINGAPORE, Feb 2 (Reuters) - A collapse in precious metals spilled over into broad markets in Asian trading on Monday, prompting broad selling of many of the top-performing stocks of the past year.
Silver fell as much as 11.25% to lows of $75.10 and gold tumbled as much as 5.34% to $4,604.47. South Korea's Kospi, last year's best performing market, slumped 5.6% at one point, while S&P 500 e-mini futures were last down 1.0%.
Here are comments from market analysts.
QUOTES:
MARC VELAN,
HEAD OF INVESTMENTS, LUCERNE ASSET MANAGEMENT, SINGAPORE:
"It’s certainly been a lively start to the week.
"This looks less like a single catalyst and more like a classic de-leveraging / liquidity squeeze. Crowded positioning in the most liquid leaders, systematic selling (vol-targeting / CTAs), and margin-driven liquidation tend to hit 'what you can sell' first. That dynamic fits with prior leaders underperforming and correlations rising.
"Precious metals: the speed and magnitude of the move suggest a positioning washout rather than a clean macro re-pricing. From here, further downside is possible, but the key question is whether forced selling continues - typically you see a sharp rebound attempt followed by a choppier consolidation phase.
"In this type of tape, the early havens are usually USD cash and short-dated, high-quality duration. Beyond that, dispersion tends to rise and traditional 'havens' can fail if the move is driven by leverage rather than fundamentals."
SEO SANG-YOUNG, ANALYST, MIRAE ASSET SECURITIES, SEOUL:
"A commodity market shock of increased volatility in gold and silver triggered a liquidity shock for institutional investors with margin calls. That resulted in a sharp drop in Bitcoin prices as well as stock markets, and the domestic market is falling more steeply than others because its rally had been much faster. We are not seeing margin calls for retail investors yet, but the market is in panic selling, so it is inevitable for market volatility to remain high for the time being."
CHRISTOPHER WONG, STRATEGIST, OCBC, SINGAPORE:
"The continued selloff in precious metals reflects a stacking of technicals and sentiment pressure. While prices are now less elevated after the correction, sensitivity to the U.S. dollar, yield repricing and Fed policy uncertainty remains high, and margin-related selling and the triggering of sell-stops further amplified the move."
(Reporting by Gregor Stuart Hunter, Rae Wee and Jihoon Lee; Editing by Ronojoy Mazumdar)
