Commodities prices were heading for their steepest one-day fall in two years on Thursday, as investors fled the market en masse amid concerns about the global economy.

Investors fear the surge in raw material prices is denting demand and forcing emerging countries' central banks to raise interest rates to try to prevent runaway inflation.

The sharp sell-off comes a day after Glencore, the largest commodities trader, unveiled details of its multi-billion dollar initial public offering. Some investors have drawn comparisons with the IPOs of Goldman Sachs and Blackstone, the private equity group, which marked the top of their respective markets.

The benchmark Reuters- Jefferies CRB index, a basket of commodities, dropped by 3.9 per cent, its biggest fall in two years. Excluding the volatile period of 2008-09 during the financialcrisis, the fall in the CRB index would be a record.

"This is one for the books," said Edward Meir, a commodities analyst at broker MF Global in New York. "Across the board you're seeing a general unwinding of the commodity trade."

Gayle Berry, base metals analyst at Barclays Capital, added: "It's a horrendous move. It just reflects how jittery these markets are."

However, analysts cautioned that commodity markets could rebound rapidly, as they have done after similar corrections over the past year. While high prices are denting demand, miners, oil companies and farmers are struggling to boost supply enough to resolve the tightness in the market. Economic growth in Asia also remains strong.

The sell-off was confined to commodities, with equities remaining relatively unaffected. The S&P 500 index of US shares dipped 0.2 per cent by midday in New York.

The commodities sell-off began in silver, which had flirted with an all-time high of $50 per troy ounce last week after a 175 per cent run-up in less than a year. Retail investors, who have been piling into the small silver market for months, scrambled for an exit to protect their gains. The metal has tumbled 25 per cent over the past week. Gold was off 2.1 per cent at $1,484 an ounce.