* Gold climbs 5 percent in heavy volume
* U.S. natural gas tumble nearly 6 pct
* Copper up more than 1 pct in thing dealings
* CBOT wheat and corn fall on profit-taking
By Marcy Nicholson
NEW YORK, March 1 (Reuters) - Gold rebounded above $1,700 an ounce on Thursday, as buyers emerged after the previous session’s 5 percent slump, while oil hit a 10-month high on fears of an Iran-related conflict, and renewed risk appetite lifted copper.
The Thomson Reuters-Jefferies CRB index, made up of 19 commodities, changed course and turned higher, closing up 0.6 percent at 324.32, as upbeat economic data in the United States and China brought back risk-on buying.
Gold bounced up 1.5 percent in heavy volume, attracting buyers who hoped the previous session’s tumble was a healthy correction rather than the start of a bear market.
”The fact that it failed to break above a high near $1,800 signified a formidable level of resistance, and more importantly shows the bulls are just not ready to take the market back to new high territory, said Adam Sarhan, CEO of Sarhan Capital.
Spot gold was up 1.5 percent at $1,721.20 an ounce by 2:38 PM EST (1938 GMT), having hit a session low at $1,694.09 an ounce.
Brent oil futures rallied more than 2 percent to a 10-month high, lifted by many factors including fear that there could be a conflict between Israel and Iran, Iran-related supply disruptions and the upbeat economic data.
“This is another Brent-driven escalation trade,” said Richard Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.
Ilczyszyn noted that Israeli leader Benjamin Netanyahu has said that if sanctions against Iran fail to work, U.S. President Barack Obama will need to commit to putting more troops on the ground.
Brent crude futures settled up 2.9 percent at $126.20 per barrel. U.S. crude oil futures settled up 1.7 percent at $108.84 a barrel.
Front-month U.S. natural gas futures ended nearly 6 percent lower after a government report showed a weekly inventory draw below market expectations.
The NYMEX front-month gas futures contract finished down 15.3 cents, or 5.8 percent, at $2.463 per million British thermal units after sliding to an intraday low of $2.444 after the EIA report.
Copper climbed more than 1 percent in below-average volume, clawing back some of the previous day’s losses, as data showed top metals consumer China will bypass a sharp economic.
China’s factories grew more than expected in February as new export orders for big firms bounced back, a government survey showed, while a private-sector report portrayed a different picture of smaller companies lagging behind the rebound.
London Metal Exchange (LME) three-month copper rose $131 or 1.54 percent to end at $8,630 per tonne.
In New York, the active May COMEX contract firmed 5.20 cents to settle at $3.9315 per lb, closer to the upper end of its $3.8485 to $3.9370 session range.
Agricultural markets trading on the Chicago Board of Trade, however, fell on profit-taking that pushed corn and wheat futures down. Declines in wheat were limited by the first sale of U.S. supplies to Iran in about three years and by prospects for more exports as Western sanctions have forced Tehran to scramble for food supplies.
Soybean prices bucked the overall downward trend in the grain and oilseed markets, closing up and matching the more-than five-month high hit earlier this week as damage to South American crops raised concern. (Reporting by Marcy Nicholson; Editing by David Gregorio)