The market is in a state of "mad shock"! Silver plunged more than 20% in two days, setting a record. The South Korean stock market plummeted, exposing the fragility of "high beta".

After a 20% drop on Thursday, the price of silver continued to decline. Due to a sharp depletion of liquidity, the market, which is struggling to find a bottom, experienced severe price fluctuations. At the same time, a global technology sell-off intensified and impacted the Korean stock market as well when the S&P suffered a huge blow. In Asian early trading, spot silver fell to $64 per ounce, down more than 40% from the historic high set on January 29, completely wiping out all the astonishing gains made last month. The price of gold also fell for the second consecutive day. Silver has historically faced more severe price fluctuations compared to gold due to its smaller market size and relatively scarce liquidity. However, recent market conditions have been particularly notable for the magnitude and speed of the fluctuations - the most volatile period since 1980, with speculative momentum and light over-the-counter trading further amplifying the volatility. "When volatility rises, market makers naturally expand bid-ask spreads and reduce balance sheet usage, resulting in the weakest liquidity when the market needs it most," said Axel Hansen, head of commodity strategy at Saxo Bank, in a report. Before some kind of order is restored, "volatility may fall into a self-reinforcing vicious cycle." Amid escalating geopolitical risks, concerns about the independence of the Fed, and support from speculative buying in China, precious metals experienced a sudden acceleration in their long-running bull market last month. Throughout January, investors built up significant precious metal positions through leveraged exchange-traded products and call options. However, this momentum came to a halt over the weekend: silver saw its largest single-day drop in history on January 30, while gold experienced its most intense plunge since 2013, causing the market to become extremely volatile. Nevertheless, the more liquid gold market has shown more resilience than silver. Several banks and asset management companies reiterated their long-term bullish views on gold this week. A Fidelity International fund manager who exited before the crash indicated readiness to buy again, and Deutsche Bank still expects gold prices to rise to $6,000 per ounce. As of the time of writing, spot silver fell 2.85% to $68.95 per ounce; gold fell 1.29% to $1,719 per ounce. Platinum and palladium also fell. The Bloomberg Dollar Spot Index, which measures the movement of the dollar, fell slightly by 0.05%, with a cumulative gain of 0.7% for the week. Sell-off hits South Korea The global risk asset sell-off has swept into South Korea, dragging down the stock prices of many tech giants in the country, revealing the vulnerability of the best-performing stock market globally this year. On Friday, the South Korean Composite Stock Price Index briefly plummeted by over 5%, before narrowing the loss. Samsung Electronics and SK Hynix both fell by over 4.8% during trading. On the previous trading day, foreign net sales reached a record high of 49.9 trillion Korean won (approximately $34 billion). Due to the over 5% plunge in the Kospi200 futures, the Korea Exchange temporarily suspended sell orders for program trading. The Korean won also weakened against the US dollar. As major suppliers to top-tier mega-scale computing companies like NVIDIA, the stock prices of South Korean chip manufacturers are increasingly affected by the fluctuating global AI investment sentiment. Although hardware stocks have relatively resisted the downturn in this sell-off (software stocks, impacted most heavily by concerns about business interruptions, have suffered the most), Friday's decline indicates that market sentiment towards a broader AI ecosystem is rapidly deteriorating. "The South Korean stock market plummeted as the US stock market downturn spread to global markets, highlighting the increasingly close connection between the Korean market and Wall Street," said Jung In Yun, CEO of Fibonacci Asset Management Global, "The Kospi index was once considered as part of a diversified investment portfolio, but now its trading pattern more resembles an extension of high-beta values in US tech stocks, reflecting its high exposure to semiconductors and global liquidity conditions." Despite the decline on Friday, the Kospi index has risen by approximately 18% year-to-date. Over the past 12 months, the index has doubled, outperforming all major indices tracked. However, this correction has brought the index below the 5,000-point mark - a target set by South Korean President Lee Myung-bak as part of his stock market revitalization plan. The Kospi index had just broken through this milestone last month. "After a strong rise, it is normal to see a period of consolidation," said Christian Heck, portfolio manager at First Eagle Investments, "Whether this current uptrend can continue will depend on corporate earnings realization and continued improvement in shareholder returns."