(Updates prices)

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Gold, silver plunge in wild trade, margins under pressure

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S&P futures slide ahead of earnings deluge, payrolls test

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KOSPI dives, Nikkei down despite polls pointing to LDP win

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Dollar and bonds steady for the moment

By Wayne Cole

SYDNEY, Feb 2 (Reuters) - Asian shares followed Wall

Street futures deep into the red on Monday as chaotic selling in

precious metals made for a nervous start to a week that is

packed with corporate earnings, central bank meetings and major

economic data.

Silver lost another 10% at one stage, as Friday's 30%

plunge squeezed leveraged positions in what had become a very

crowded trade. Dealers said pressure on the UBS ‌SDIC silver

futures fund in China added to the rout, with talk of investors

having to sell profitable assets to cover margin calls.

Adding to the unease was a move by the CME to raise margins

on a number of futures contracts, including gold ​and silver.

Oil prices also fell more than 4% as President Donald Trump said

over the weekend Iran was "seriously talking" with Washington,

perhaps lessening the risk of a U.S. military ‍strike on the

country.

The jitters saw South Korea's formerly high-flying KOSPI

shed 5.5%, the biggest one-day loss since the

tariff-induced market mayhem of last ⁠April.

MSCI's broadest index of Asia-Pacific shares outside ⁠Japan

sank 2.8%, while Chinese blue chips

lost 1.0%, with heavy falls in gold indexes.

Japan's Nikkei fell 1.0%, supported only briefly by an

opinion poll suggesting Prime Minister Sanae Takaichi's Liberal

Democratic Party was likely to score a landslide victory in ‌next

week's lower house election.

Such a victory would likely make it easier to push through

aggressive stimulus policies, ​and ease political uncertainty.

More debt-funded spending could pressure bonds and the yen, with

Takaichi talking up the benefits of a weaker currency for

exports.

It was also a busy week for earnings in Europe, with around

30% of Euro STOXX market capitalisation due to report. EUROSTOXX

50 futures and DAX futures both ⁠fell 1.1%,

while FTSE futures dipped 0.5%.

S&P 500 futures lost 1.2% and Nasdaq futures

fell 1.6%, ‍with much now riding ​on earnings to support

valuations. About one quarter of the S&P 500 set to report this

week, and growth in earnings per share was running at 11% on the

previous year, when consensus had been for 7%.

The focus will be on tech majors Alphabet, Amazon ( AMZN )

and AMD, particularly costs and benefits of AI

in the ‍wake of Microsoft's ( MSFT ) badly received results.

Analysts at Goldman Sachs noted consensus estimates for AI

hyperscaler capex this year had climbed to $561 billion, up 38%

on 2025 and compared to $540 billion expected at the start of

earnings season.

DOLLAR STEADIES AS YEN SLIPS

In currencies, the dollar looked a little steadier as early

weakness in the yen saw it edge up 0.1% to 155.00.

Yet, the euro still added 0.2% to $1.1868, regaining

some of Friday's 1% retreat.

The dollar rally had been initially triggered by Trump's choice

of former Federal Reserve governor Kevin Warsh to become the

next chair of the central bank.

Analysts assumed Warsh was less likely to press for all-out

rapid rate cuts than some other possible choices, though he has

sounded more dovish than current chair Jerome ​Powell.

"Trump is most unlikely ‍to have nominated Warsh if he was

not genuinely supportive of lower interest rates, and for which

there is plenty of evidence Warsh believes that the economy can

achieve higher rates of non-inflationary growth," said Ray

Attrill, head of FX strategy at NAB.

This was why market pricing remained at two rate cuts for

this year, ​with a move seen unlikely until June when,

presumably, Warsh will be chair. Futures imply a 68% chance of a

steady outcome at the April meeting and, oddly, 68% for an

easing in June.

That outlook may change should the January payrolls report

on Friday surprise significantly in either direction, assuming

the government is open and it is actually released.

Also on the menu this week are policy meetings by the Reserve

Bank of Australia, European Central Bank and Bank of England.

The RBA is an outlier in that markets imply around a 75%

chance it will raise interest rates by a quarter point to 3.85%,

so reversing one of three cuts delivered last year, in an

attempt to quell resurgent inflation.

In commodity markets, volatility was the main theme as gold

fell 4.1% to $4,665 an ounce, having shed almost 10% on

Friday. Silver was last ​down 7.0% at $78.61, with trade

extremely choppy.

"We think this is a buying opportunity for both gold and

silver as the market eventually resumes their preference for

hard assets relative to the U.S. dollar," said Vivek Dhar, a

mining and commodities strategist at CBA.

"We still maintain our forecast for gold futures to reach

$US6,000/oz in Q4 2026 on stronger structural safe-haven demand

and a lower Fed Funds rate."

Oil prices fell as investors waited anxiously to see whether

the U.S. would ‍strike Iran, or some sort of deal could be

struck.

Brent slid 4.5% to $66.30 a barrel, while U.S. crude

dropped 4.6% to $62.19 per barrel.