Most of our E34 had this problem of sorts but trying to trouble-shoot a particular clunk sound can be a real challenge. Here is my situation:

Car E34 95 Touring, Euro model with M50TU motor and 5spd.

Symptoms: From cold or after parking for some hours. Reversing out of a parking bay or garage, I will get a large CLUNK on the driver side, then a small clunk of the passenger side. Definitely coming from the wheels/suspension or steering link areas.
Things already replaced: Pair of new upper control arms. (This was the first suspect as the driver side had a leaking balljoint. Not it!)
Next was the steering link tie-rod end. Driver-side had one replaced as it balljoint was in bad shape and nut was threaded. (Actually clunk worsen now!!!). The 22mm nut of the shocks are also tightened. (Not it as well!!)
Upper and Lower spring pad was also new but shock absorbers will be next in line for replacement. I also found that the front is a bit mushy as I could sit on the fender and get a dip of about 2-3 inches. Shocks done ?.

Could the shocks be over-extending themselves?. Pls advise as I strongly suspect that replace the shocks will eliminate this clunk syndrome. Thanks.