"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 (New York Mercantile Exchange: CLCV1) plunged 3.5 percent, or $3.05 to close at $78.20 per barrel, the first close below $80 since October. Gold (CEC:Commodities Exchange Centre: GCCV1) 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.
"Fundamentals haven't changed but investor sentiment certainly has," Su told CNBC. "We certainly do (expect more downside). All our September quarter targets have either been reached or are very close to being achieved. We will be revising our targets lower soon."
Analysts are predicting more declines for commodities across the board, including oil and gold.
Sandy Jadeja, Chief Technical Analyst at CityIndex, said oil is on a firm downtrend after breaking below $97.51.
"Our expectations are if oil fails to hold $80.80 at the close of this week, this could then lead to further prices declines towards $75 by next week," he said. "In order for oil to reverse current (downtrend), it would need to climb above $89."
Daryl Guppy, a technical analyst and trader, is even more bearish, saying that if oil sank below $78, there is a high chance it could trade around $68.
"Downside pressure is strong and there is no current evidence of any strong consolidation activity," he told CNBC.
While investors need to wait on the sidelines till the selling stops, Jonathan Barratt, Founder of Barratt's Bulletin, told CNBC Asia's "Squawk Box" some of the commodities were now getting cheap.
"We are looking for a few key levels in crude; obviously if we get a break back through on the top side, $80.50-$80.60, then we can signal a pretty important low," Barratt said. "Gold needs to hold above that $1,535 level and we need to see a break back through $1,600. It's there, but I think there's still a lot of selling pressure."
- By CNBC's Jean Chua.
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