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Commodities bulls may have finally “thrown in the towel,” Marc Faber, the editor and publisher of the 'Gloom, Boom and Doom' report told CNBC, after commodities suffered their biggest one-day fall this year on Thursday.
“This weakness is a clear indication of a global economic contraction…fundamentals have been deteriorating for some time but now the eternal bulls have thrown in the towel,” Faber said on Friday. “In other words, the perception has changed.”
Faber expects more weakness in industrial commodities, though he said agricultural commodities "look better".
The Thomson Reuters-Jefferies CRB commodities index lost more than 2 percent on Thursday, its biggest decline this year, bringing it close to its lowest level since September 2010, after disappointing economic data from the U.S. and manufacturing reports from China and Europe pointed to a persistently weak global economy .
West Texas intermediate plunged 3.5 percent, or $3.05 to close at $78.20 per barrel, the first close below $80 since October. Gold was trading at $1,561.25 per ounce in early trading in Asia on Friday, after losing close to 3 percent on Thursday.
Andrew Su, CEO of Compass Markets, a Sydney-based commodity broker, said he has been forecasting weakness in commodities since the beginning of the year and does not expect the selling to stop any time soon.
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