COMMODITIES-Profit taking hits grains, gold; index up 3 pct in Jan

* Benchmark index rises most in six months in January

* Market readies for key jobs data due Friday

* Grains knocked lower by profit taking

* Energy markets dominated by spread trading

NEW YORK, Jan 31 (Reuters) - Commodities handed back some of the previous day's gains on Thursday, but stronger crude oil, corn and cotton prices in January pushed the complex to its best monthly performance in six months in January. Soybeans and wheat were pushed lower on Thursday by profit taking, while gold slipped 1 percent on technical selling after hitting two-week highs a day earlier. That offset a buoyant crude market. A resurgent U.S. dollar pushed commodities off Wednesday's highs, while a mixed bag of U.S. data gave more reasons for investors to be cautious ahead of key jobs report due on Friday. Thursday's data showed improving American income growth in December and better wage growth, which helped to allay some concerns over the health of the world's largest economy after its unexpected contraction in the fourth quarter. On Wednesday, the Federal Reserve pledged to maintain its monthly $85 billion bond-buying program. Investors are now waiting for nonfarm payrolls data on Friday for a close look at the U.S. labor market. Economists polled by Reuters forecast a rise to 160,000 new non-farm jobs in January, up from 155,000 in December, with the unemployment rate remained steady at 7.8 percent. The Thomson Reuters-Jefferies CRB index, which serves as a global indicator for commodities, settled down 0.25 percent on Thursday, but rose 3 percent on the month, its biggest monthly gain since August last year. Fourteen of the CRB's 19 components rose in the first four weeks of the year, with cotton, corn, light crude and nickel the top gainers. Cotton was the stand-out performer, soaring more than 10 percent for its best four-week performance since February 2011, as speculative investors piled into the fiber betting on lower acreage and robust demand from China. After two years of double-digit percentage falls, the market was seen by the fund community as oversold even though fundamentals have not improved. Corn rose over 6 percent during the month on fresh concerns about crop supplies, while crude jumped over 6 percent and nickel gained 7 percent. In contrast, sugar lost 3.5 percent in January as investors braced for another bumper crop out of top producer Brazil. Broader financial markets started the year on a strong note too. S&P 500 posted its best monthly gain since October 2011 as investors cheered a compromise that temporarily postponed the impact of the "fiscal cliff" and fourth-quarter earnings were better than expected. The euro posted its best month in over a year.

WEAKER GRAINS U.S. soybean futures turned lower on Thursday on profit-taking, after hitting a six-week high on Wednesday, as forecasts for better crop weather in South America eased concerns about harvest delays and production losses there. Chicago Board of Trade March soybeans fell 10-1/4 cents, or 0.7 percent, to $14.68-1/2 per bushel. The contract, which struck a six-week high on Wednesday, rose this month for the first time in five months, adding 3.1 percent. Wheat fell along with soybeans. Wheat for March delivery declined 7-1/2 cents, or 1 percent, to $7.79-1/2 per bushel. The spot wheat contract gained 1-1/2 cents in January, the first monthly gain in four months. "The market's rallied pretty significantly in the last few sessions, so on the final day of the month it's no surprise to see a little profit-taking," said Karl Setzer a commodity trading adviser and market analyst at MaxYield Cooperative. All eyes have been on South American weather this week as overly wet conditions stalled early soy harvest in Brazil and persistently dry weather threatened corn and soybean crops in neighboring Argentina. Crops from both major exporters are crucial for replenishing tight global supplies.

GOLD SLIPS Gold fell nearly 1 percent on technical selling after the previous session's rally. The metal hit a two-week high above $1,680 an ounce on Wednesday after data showed the U.S. economy unexpectedly shrank in the fourth quarter. Bullion's repeated failure to rise above major resistance at $1,700 in January triggered technical selling, traders said. "I would buy puts on any rallies. The market looks bearish as option volatilities are falling," said COMEX gold options floor trader Jonathan Jossen. Spot gold was down 0.8 percent at $1,663.5 an ounce U.S. COMEX gold futures for February delivery settled down $19.30 an ounce at $1,660.60, with trading volume about 10 percent below its 250-day average, preliminary Reuters data showed.

ENERGY AND SPREAD TRADES On energy markets, brent crude oil futures rose to a three-month high on Thursday, widening its premium over U.S. crude, as concerns about stockpiles in the U.S. Midwest prompted heavy trading based on the spread between the two benchmarks. Brent's premium to U.S. crude jumped to $18 a barrel for the first time since early January. Traders cited concerns about stockpiles at the Cushing, Oklahoma delivery point for the U.S. contract, which have pushed to record highs. London-traded Brent rose 65 cents to settle at $115.55 a barrel, the highest settlement since mid-October, reaching a session peak of $115.76. For the month, Brent crude futures gained $4.44, or 4 percent. The spread between Brent and U.S. crude settled at $18.06 as U.S. crude lost 45 cents to settle at $97.49 a barrel, a day after it hit the highest price in more than four months. For the month, U.S. crude gained $5.67, or 6.17 percent. Traders focused on the timeline for the resumption of previous throughput levels on the Cushing-to-Texas Seaway pipeline, which started up in early January. The line will move U.S. and Canadian crude to the Gulf Coast, where it fetches a premium. Front-month February U.S. gasoline futures snapped 10 straight days of gains that had tacked 12 percent on to the price as the contract headed into expiry at settlement.

Prices at 5:09 p.m. EST (2209 GMT)

LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 97.41 -0.53 -0.5% 6.1% Brent crude 115.61 0.71 0.6% 4.1% Natural gas 3.339 0.004 0.1% -0.4%US gold 1660.60 -19.30 -1.1% -0.9% Gold 1663.40 0.41 0.0% -0.7% US Copper 373.20 -1.80 -0.5% 2.2% LME Copper 8165.00 -61.00 -0.7% 3.0% Dollar 79.237 -0.044 -0.1% 3.2% #DIV/0!US corn 740.50 0.25 0.0% 6.1% US soybeans 1468.50 -10.25 -0.7% 3.5% US wheat 779.50 -7.50 -1.0% 0.2%US Coffee 146.95 -0.75 -0.5% 2.2% US Cocoa 2205.00 26.00 1.2% -1.4% US Sugar 18.78 0.07 0.4% -3.7%US silver 31.351 -0.826 -2.6% 3.7% US platinum 1677.40 0.00 0.0% 9.0% US palladium 745.70 -5.70 -0.8% 6.0%