They said it would keep rising, so I put in a large sum… Gold and silver ETF investors 'shaken' [Market Preview Today]

On the 2nd, the key for Korean stocks will be how they digest the “Kevin Warsh shock” that hit U.S. equities on the previous trading day, the 30th of last month. President Donald Trump on the 30th named former Fed Governor Kevin Warsh as the next Fed chair.

KOSPI lifted by semiconductors… foreigners take profits in force

In the previous session, the KOSPI rose 3.11 points (0.06%) to 5,224.36, while the KOSDAQ fell 14.97 points (-1.29%) to 1,149.44.

On the day, the KOSPI index climbed broadly on gains in the semiconductor sector and briefly touched the 5,320 level mid-session, but finished after sharply paring gains amid heavy profit-taking by foreign investors and institutions. Retail investors posted net buying of 1.7317 trillion won, cushioning the index, while foreigners and institutions recorded net selling of 1.2943 trillion won and 529.4 billion won, respectively.

The KOSDAQ was supported by net buying of 1.3346 trillion won from institutions, but individuals and foreigners took profits with net selling of 982.4 billion won and 224.9 billion won, respectively.

Korean equities have recently been underpinned for some time by a rally in semiconductors. Among top KOSPI market-cap names, SK hynix (+6.5%) rose to 917,000 won, setting a record high, while SK Square (+7.34%) and Samsung Electronics (+1.24%) also extended gains.

On the KOSDAQ, Rino Industrial (+14.98%), Jeju Semiconductor (+17.5%) and PSK (+12.64%) were among the strong performers.

New York stocks fall on “Warsh shock”

However, in New York—often seen as a bellwether for Korean markets—the semiconductor index slumped in the previous session and tech shares broadly struggled. Investors appear highly sensitive to uncertainty over whether Kevin Warsh, tapped as the next Fed chair, is a “hawk” or a “dove.”

On the 30th of last month, the S&P 500 fell 29.98 points (-0.43%) from the prior session to 6,939.03, while the Nasdaq Composite, heavy with tech stocks, dropped 225.30 points (-0.94%) to 23,461.82.

The Philadelphia Semiconductor Index slid 3.87%. Most of its 30 constituents declined. KLA plunged more than 15% amid expectations for slowing results, and major chipmakers such as AMD (-6.13%), Lam Research (-5.93%) and Micron Technology (-4.80%) also fell. Sandisk, however, jumped 6.85% on strong fourth-quarter earnings.

AMD closed down more than 6% after reports that the launch schedule for its next-generation AI accelerator, the MI450 series, is being delayed.

Microsoft (MS) extended losses, falling 0.81% after a sharp drop the day before, while other mega-cap tech names such as Meta (-2.95%) and Amazon (-1.01%) also traded lower. Game-related stocks plunged, including Unity Software (-24.22%) and Roblox (-13.17%), on speculation that Google’s new AI research program under development, “Project Genie,” could threaten existing products for game development.

Gold and silver ETF investors also “are we trembling?”

The market is grappling with Kevin Warsh-related uncertainty because it is not easy to gauge the direction of his rate policy.

Warsh showed hawkish leanings during his past tenure as a Fed governor. However, the market expects the former official to move toward cutting policy rates in the short term, on the view that he is likely to make a political decision aligned with President Trump’s “code.”

If Warsh seeks not to offend President Trump, the Fed’s independence could come under question—potentially feeding back into market anxiety in a vicious cycle.

International gold and silver prices also halted their steep rally and plunged on uncertainty. On the previous trading day, the 30th, spot gold fell 9.5% from the prior session to $4,883.62 per troy ounce.

On the New York Mercantile Exchange, April-delivery gold futures tumbled 11.4% to $4,745.10 per troy ounce—the largest drop since January 1980. Silver futures collapsed 31.4% to $78.53 per troy ounce, the steepest fall since March 1980, while spot prices also slid 27.7% to $83.99.

As commodity prices plunged, Newmont, the world’s largest gold miner, fell more than 11%, while mining shares such as Freeport-McMoRan (-7%) and Albemarle (-5%) also sank in tandem.

Against this backdrop, gold and silver ETFs are also expected to swing sharply early in the session. The sixth most heavily subscribed ETF in the Korean market last week was “KODEX Silver Futures (H).” “ACE KRX Gold Spot” ranked 10th in net inflows. Korean investors also bought gold- and silver-related ETFs in U.S. markets in large numbers.

Gold and silver price jitters to ease gradually"

Experts say that amid heightened uncertainty, sector rotation is likely to center on companies with solid earnings outlooks. Jeong Hae-chang, a researcher at Daishin Securities, said, “A sector-rotation strategy led by companies in areas with strong earnings expectations such as securities and distribution remains valid.”

There are also forecasts that rotation will emerge within commodities as well. Choi Jin-young, a researcher at Daishin Securities, said, “Although gold and silver prices have fallen, jitters are likely to subside as emerging markets step in to buy on dips,” adding, “However, there may be more opportunities in rotation into base metals than in dip-buying opportunities in precious metals.”

Han Ji-young, a researcher at Kiwoom Securities, said, “This week, volatility is expected to expand amid the aftershocks of the precious-metals crash and the jockeying over analysis of the incoming Fed chair’s policy stance.” He added, “Trading concentration among domestic market participants is likely to remain heavier in the KOSDAQ than the KOSPI,” but advised that “while the KOSDAQ is in an environment where stock prices can rise on expectations and flows rather than earnings and valuation, U.S.-driven uncertainty could provide an incentive for profit-taking following last week’s surge.”

Reporter Han Seon-han-gyeol