Many commodities were set to end May with their worst showing in years as investors sold off in the sector amid doubts about demand for raw materials and as Europe grappled with a simmering debt crisis.
Some markets inched higher on Thursday, but that did little to ease the losses inflicted during the rest of the month as investors worried about a fragile U.S. economic recovery and hesitation in China to aggressively pump up a similarly sluggish economy.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, was set to end the month with a 10 percent loss and at its lowest point since September 2010.
Amid the gloomy market sentiment, some investors had correctly bet on the falling markets.
"I'm happy, I'm making a lot of money on that. My managers have been positioned on the short side," said Gabriel Garcin, portfolio manager at Europanel Research & Alternative Asset Management in Paris, which invests in European hedge funds.
Gold was on track to post its worst May performance in 30 years, with bullion's safe-haven appeal crushed by a firmer dollar as Europe's woes pushed the euro to two-year lows.
U.S. crude was due to post its biggest monthly percentage drop since late 2008, Brent oil its steepest in two years and London copper its longest losing streak in a year.
"Until markets can see some light at the end of the tunnel, there's no compelling reason to be too long in risk assets," said Vishnu Varathan, market economist at Mizuho Corporate Bank.
"It does look there is a clear risk that you could see an extended sell-off beyond this month if the euro zone situation doesn't get resolved in an acceptable manner."
Commodities have seen strong outflows from investors in recent months, a sharp contrast to the massive inflows during most of the past decade as institutional investors sought to capture strong growth in emerging markets and diversify their portfolios.
Poor performance last year and early this year have led investors to get frustrated and exit some of the best-known commodity hedge funds, a handful of which have shut down after heavy redemptions.
April saw $1.1 billion of outflows in overall commodity investment after $2.2 billion the previous month, Barclays has said.
OIL MARKET STILL NERVOUS
London Brent crude edged up near $104 a barrel, after hitting a 2012 low of $102.85 on Wednesday, but the market was still nervous about the demand outlook and euro zone crisis. For the month, Brent is down more than 13 percent, the biggest fall since May 2010.
U.S. oil rose just above $88 a barrel, but off more than 16 percent this month, its worst showing since December 2008.
Key industrial metal copper rose slightly, regaining the $7,500 per tonne level after hitting a 2012 trough of $7,422.75 earlier.
Copper, also worn down by a slower economy in top consumer China, has lost nearly 11 percent in May, its third monthly loss in a row, the longest monthly losing streak in a year.
"Markets are still divided on what kind of stimulus China will be able to provide. In any case it doesn't look like it will be a credit bonanza that the global economy can feed off on," Varathan said.
Spot gold inched higher above $1,570 an ounce, but was looking to stretch its losses to a fourth month, matching a similar run from October 1999 to January 2000 when gold traded below $300.
Rather than acting as a safe haven and moving in line with the dollar and government bonds, as it did for much of 2011, gold has traded more in line with other commodities of late.
The hunt for safe-haven assets in Europe spread to Austrian and French bonds, although European shares and the euro regained some stability.
In agricultural markets, both Chicago corn and soybeans moved higher, although not enough to purge losses this month which are the biggest since September, amid weakness elsewhere.
Chicago Board of Trade July soybeans has lost 8.4 percent this month and corn has slumped 15 percent.
Arabica coffee futures on ICE hovered above a 22-month low and was set for a 7.6 percent loss in May while robusta coffee on Liffe consolidated near an 8-1/2-month high and was poised for a 10.5 percent monthly jump.