By Barbara Lewis and Eric Onstad
The 19-commodity Reuters-Jefferies CRB index <.CRB>, a global benchmark for the asset class, has so far shed over 6 percent since the end of last week and dropped 3.75 percent on Thursday.
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Silver touched a five-week low and was set for its deepest weekly decline in nearly 30 years.
"We think that we just saw a commodity bubble pop here this week. We think the speculative buying that has taken place in commodities the past six months well exceeded fair value in so many commodities," said James Cordier, senior analyst at Optionsellers.com in Florida.
The dollar index <.DXY> this week fell to its lowest since July 2008, but the currency rebounded on Thursday.
The euro fell nearly 1 percent after comments from the European Central Bank President did not signal an imminent interest rate hike.
A weak dollar is often supportive for dollar-denominated commodities. But the potentially bullish impact can be offset by the link to stalling economic growth in the world's largest economy, with major implications for demand for oil and other commodities.
Reports on Wednesday showed a slowdown in the United States' vast services sector.
"I think what's happening is risk aversion across all the asset classes. Everyone thought the U.S. was on a growth trajectory, but now some talk out of the U.S. is showing pretty mediocre growth," said Patrick Armstrong of Armstrong Investment Managers in London.
Worries that high prices are crimping demand and concern about weak economic growth sent oil futures careening lower.
Brent futures, which led a market rally to more than $127 a barrel at the start of April, tumbled 4.9 percent to $115.25 a barrel after touching an intraday low of $115.12.
U.S. crude for June shed 5 percent to $103.80 a barrel.
Economists have said the economy can still cope with oil prices at current levels. But anecdotal evidence and popular perceptions that pump prices around $4 a gallon in the world's biggest oil user have begun to change U.S. driving habits has added momentum to a market sell-off.
The sell-off on other commodities has been still sharper.
Spot silver tumbled nearly 8 percent to $36.32 an ounce, down over 20 percent so far this week.
It is on track for its largest weekly decline since at least 1982 after investors took profits from a rally to a record high just shy of $50 an ounce last week.
On Thursday, holdings of metal in global silver ETFs (exchange-traded funds) fell by more than 15 million ounces, the largest one-day decline this year, which reduced holdings to their lowest since February 23.
Gold dropped 1 percent to below $1,500 an ounce, its weakest in more than a week.
For the commodities asset class, China and other emerging economies still offer a growth story, analysts say.
Fund manager Armstrong said he planned to "start adding copper at some point" on the assumption China, the world's biggest consumer of base metals, would continue to underpin demand.
On Thursday, however, jitters about global economic growth knocked copper to its lowest this year and swept the rest of industrial metals with it.
LME copper shed more than 4 percent to $8,750 a ton, while tin was the biggest loser, shedding more than 7 percent, to $28,500 a ton.
"It's a broad-based, risk-off selling momentum that has gathered pace," said Barclays Capital analyst Gayle Berry.
Soft commodities were also caught up in the sell-off.
Arabica coffee futures, which hit a 34-year peak earlier this week, fell about 3 percent, and cocoa gave up 4.5 percent as investors liquidated long positions.
U.S. grain and soybean futures joined in the rout.
Chicago Board of Trade July corn lost 3.3 percent to $7.05 a bushel and CBOT July soybeans fell 2.7 percent to $13.15 a bushel.
(Additional reporting by Amanda Cooper, Nigel Hunt, Marcy Nicholson, Sue Thomas, Claire Milhench; editing by Anthony Barker)