A sudden collapse in precious metals prices on Monday spilled beyond commodity markets and triggered widespread selling in Asian equity markets, with several of the region’s best-performing stocks over the past year among the hardest hit.
Silver experienced a sharp intraday drop of as much as 11.25% to a low of $75.10, while gold slid as much as 5.34% to $4,604.47. The fallout extended to equities: South Korea’s Kospi - the top-performing market in the prior year - fell as much as 5.6% during the session. In the United States, S&P 500 e-mini futures were last quoted down about 1.0%.
Traders and strategists attributed the turmoil to a mix of forced selling, crowded positioning in popular trades and liquidity pressures rather than a single macroeconomic revelation. Several market professionals characterized the move as a de-leveraging episode that pressured the most liquid, high-conviction leaders first.
"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."
- MARC VELAN, Head of Investments, Lucerne Asset Management, Singapore
Market commentary from Seoul pointed to margin-related pressures spilling over from commodities into broader risk assets. Analysts noted the effect on cryptocurrencies and equities as institutional investors faced margin calls.
"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."
- SEO SANG-YOUNG, Analyst, Mirae Asset Securities, Seoul
Another strategist pointed to technical and sentiment pressures that compounded the sell-off, while noting that sensitivity to U.S. dollar moves, shifts in yields and ongoing uncertainty about central bank policy kept margin-related dynamics elevated.
"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."
- CHRISTOPHER WONG, Strategist, OCBC, Singapore
Market participants suggested that the immediate price action may reflect forced unwinds of leveraged positions rather than a straightforward re-evaluation of metals on fundamentals. That distinction matters for what comes next - if selling is largely margin-driven, the path may include sharp rebounds followed by volatile consolidation. If forced selling persists, further downside remains possible.
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