NEW YORK, Sept 6 (Reuters) - Commodity markets were for the most part little changed on Thursday as an initial rally fueled by the European Central Bank's potentially unlimited bond-buying program petered out.
Even as U.S. stock markets surged nearly 2 percent on hope that the ECB might at last draw a line under the euro zone debt crisis, oil and copper failed to maintain early gains as traders bet that market fundamentals could not justify higher prices.
Gold, however, rose 0.5 percent to close above $1,700 an ounce for the first time since March.
Risk markets rallied broadly at the start of U.S. trading on upbeat U.S. jobs data and news that ECB President Mario Draghi had won central bank agreement to undertake unlimited, short-dated bond purchases under strict conditions to ease funding pressures on governments that sought help.
After rising to its highest interday level since April, the Thomson Reuters-Jefferies CRB index of 19 commodities closed just 0.2 percent higher at 308.89. The index rose sharply in July, but has largely stalled over the past month.
Wheat emerged as the day's biggest commodity gainer, rising 3 percent not on economic sentiment but on speculation that global importers would soon scramble for U.S. cargoes as a recent spate of large Russian sales depletes available supplies.
Market focus is now zeroed in on U.S. nonfarm payroll data due early on Friday, expected to show an increase of 125,000 jobs - a potentially decisive factor in the Federal Reserve's deliberations next week over whether to push ahead with a third round of quantitative easing to kick-start the economy.
Data on Thursday showed U.S. private employers added a stronger-than-expected 201,000 jobs in August and new claims for jobless benefits fell last week to the lowest level in a month, upbeat signals for a struggling labor market.
GOLD BACK IN VOGUE
Spot gold rose 0.5 percent to $1,701 an ounce, having pulled back from a six-month high of nearly $1,714.
"Gold is holding because the market has been given what it was hoping for, but in order for gold to move decisively higher from here we need to see what numbers the U.S. will bring to the table," Ole Hansen, senior manager at Saxo Bank, said.
Gold tends to benefit from an environment of low interest rates, and any resulting strength in the euro against the U.S. dollar could further fuel the rally. The euro posted small gains after the ECB decision, hitting a two-month high.
OIL LOOKS BEYOND STOCK DRAW
Benchmark London Brent crude rose 40 cents, or 0.35 percent, to settle at $113.49 a barrel, pulling back from a midday peak of $115.15 as profit-taking set in.
In addition to the ECB news, oil prices had been supported by data showing U.S. crude stocks fell 7.43 million barrels last week. A decline was largely expected after supply disruptions following Hurricane Isaac last week, but the draw-down was twice as large as analysts had forecast.
Oil prices have surged more than $25 a barrel since mid-June on signs of tightening global supplies, but the rally has stalled for the past few weeks amid signs that the United States is considering releasing strategic oil reserves.
December wheat futures at the Chicago Board of Trade climbed 2.8 percent to $8.91-3/4, propelled higher by news that Egypt's state-run importer had bought 475,000 tonnes of wheat from Russia, Romania and Ukraine at an international tender.
The deal provoked fresh speculation over whether Egypt, the world's top wheat importer, was trying to grab as much Russian wheat as possible before any move by Moscow to limit sales.
Russia has repeatedly denied that it would ban exports - like it did in 2010 after a historic drought and sparking a major rally in prices - due to a poor crop this year, yet traders remain skeptical of its denials.
"Russia could be out of the market by the end of October," said grains analyst Dan Basse of AgResource Co in Chicago, who has clients in the Black Sea region. "People could be forced to buy from the United States or Canada."