Gold ended June with its biggest quarterly loss on record, while copper, corn and coffee all ended with deep declines, adding to evidence that a decade of super-cycle gains for commodities is over.
Rallying equities already had investors pulling money from slumping raw material markets last week, when Federal Reserve Chairman Ben Bernanke indicated that the U.S. central bank would soon wind down its bond-buying program.
Concerns of slowing growth in China, a major consumer, added to the bearish vibe and an intense credit crunch there last week unnerved global traders. Anxiety eased on Friday as Chinese stocks rebounded and its central bank issued soothing messages.
Benchmark Brent crude oil fell 66 cents on Friday and sank 7.1 percent since March for a third quarterly decline, the longest streak in 15 years. Copper, near its lowest price in three years, lost 10.3 percent in the quarter. New-crop corn dived to a seventh day of losses after the U.S. government reported that farmers had planted larger crops than expected.
The ThomsonReuters-CRB commodity index, down 7 percent for the quarter, has fallen 23 percent since March 2011. Apart from the financial crisis, it is the deepest and most sustained decline since raw material markets began to rally in early 2002, a definitive end to a cycle of super-charged gains.
Gold has fallen the most, as rising bond yields and easing inflation worries made it less attractive to hold a non-yield-bearing asset. Investors fled gold exchange traded funds and sliding prices failed to entice physical buyers.
"Prices are basically falling in a vacuum as there's no counterparty to buy," London and Capital Investment Director Ashok Shah said.
"The market needs to get into extremely oversold territory before you will see people coming back in. The view is that it's always been difficult to decide what is fair value," he added.
In early trade, spot gold hit a low of $1,180.71 an ounce, its cheapest since August 2010. Quarter-end book-squaring and bargain-hunting boosted it in later trade and it rose 2.3 percent to $1,126.76 an ounce.
From March to June, gold slid about 23 percent, its sharpest quarterly drop ever based on Reuters data from 1968. Without a major rally, gold should post its first annual fall in 12 years.
COPPER HIT BY SLOWER CHINA GROWTH
Other markets were muted on Friday. Even though Fed officials made comments aimed at soothing investors, many remained concerned about a quick end to stimulus after surprisingly strong U.S. consumer sentiment and other data.
Copper concluded its steepest quarterly drop in two years, also depressed by concerns over slower growth in top consumer China. Three-month copper on the London Metal Exchange, up 0.2 percent at $6,765 a tonne, lost 10.3 percent for the quarter, its third quarterly decline in a row.
"In terms of copper demand we're entering a season of relative softness in China. From the China side I see copper more likely to soften sequentially rather than strengthen," Barclays Capital analyst Sijin Cheng said.
Grain markets were particularly active, focused on crop and stockpile fundamentals rather than the Fed.
A U.S. Department of Agriculture report showed lower-than-expected corn stockpiles but projected larger-than-expected corn acreage this summer. Old-crop corn rallied more than 2 percent but new-crop December dived 6 percent for a seventh straight losing session, the longest such stretch in two years.
Some analysts remained hopeful that commodities could rise in the second half of this year if the Fed maintains stimulus a bit longer, China stabilizes and the European economy begins to show signs of life.
"If you look at all those things, going into Q3 you can see more stable markets and a bit of a bounce from here," said INTL FC Stone analyst Ed Meir.