London - Major commodity indexes had one of their worst months on record in October, as commodity prices plummeted in anticipation of a severe global economic downturn.
The speed of the declines across the major commodities and equities indexes illustrates the level of pessimism about the economic outlook.
"The markets are pricing in a severe recession," said Michael Lewis, head of commodities research at Deutsche Bank. "The entire universe of commodity indexes has gone down."
Prices have tumbled across the commodity spectrum as investors expect demand for oil and industrial metals to suffer marked declines if the global economy goes into recession.
Oil, for example, is down more than 50 percent from a record peak of $147.27 a barrel in July. Metal prices have all seen big falls.
"Many metals are now trading well into the cash cost curve with aluminium, zinc, lead and nickel prices all now trading below marginal costs," Barclays Capital said in a research note.
October's losses follow on from a drop of more than 20 percent in commodity index returns in the third quarter.
The impact of the crisis in the banking sector, that has forced governments around the world to shore up ailing banks, is spilling over into the wider economy.
Investors have moved into cash, or have been forced to sell investments in stocks, bonds and commodities to cover losses elsewhere.
Gold, a traditional safe-haven in turbulent times - posted its biggest monthly decline in 25 years in October, as investors' rushed into U.S. dollars, boosting the U.S. currency and putting pressure on gold.