COMMODITIES-Oil, gold pressured by U.S. fiscal standoff
* Oil, gold slip after Republicans abandon fiscal cliff plan
* U.S. budget talks left in limbo
* U.S. grains bounce, soy still under pressure
* Investors await release of CFTC data
SINGAPORE, Dec 21 (Reuters) - U.S. crude futures and gold slipped on Friday after Republican lawmakers abandoned their fiscal cliff plan, leaving budget talks with President Barack Obama in limbo, but London copper bounced from lows while U.S. grains regained strength on technical buying.
U.S. crude futures for February fell more than $1 to an intraday low of $88.93 a barrel on worries a deadlock in the fiscal talks could push the economy into recession in 2013, hurting demand in the world's biggest oil consumer.
But oil was still on track for its biggest weekly gain since August.
Bullion slipped more than half percent to hit a low around $1,635 an ounce, moving towards a four-month low.
Republicans delivered a stinging rebuke on Thursday to their leader, House of Representatives Speaker John Boehner, when they failed to back an effort designed to extract concessions from Obama to head off $600 billion in tax hikes and spending cuts starting January.
The Republican-led U.S. House of Representatives, which abruptly recessed late on Thursday, may return as soon as Dec. 27 with a yet-to-be-decided new plan, said a senior party aide.
"Even though the fiscal cliff talks progress is quite slow, most investors seem to be quite optimistic that some kind of deal will come probably after December, likely in January," said Lynette Tan, senior investment analyst at Phillip Futures in Singapore.
"Commodities that are related to construction and economic growth directly, like oil and base metals, could be on the upside as the U.S. economy seems to be turning for better. China's economy is looking better as well," said Tan.
Recent economic data from the U.S. and China has raised hopes the world's two biggest economies are on the mend.
Gold remains set for a twelfth annual growth on rock-bottom interest rates, concerns over the financial stability of the euro zone and diversification into bullion by central banks.
Iraq made its first major move in years to bolster its gold reserves in recent months, while Brazil increased its holdings of bullion by almost a third in November, data from the International Monetary Fund showed on Thursday
"Gold for now is pretty much trading according to how the fiscal cliff negotiations are going on. That's why we see a huge drop over the last few days," said Tan at Phillip Futures.
"However, towards January we are likely to see gold rising again. On the long-term, the central banks are still buying gold, and also before the Chinese New Year physical demand will come in."
In industrial metals, three-month copper on the London Metal Exchange snapped a six-day losing streak, but is on track for its biggest weekly loss since early June, a fall of 3 percent.
"Copper is taking a pause after having fallen sharply over the past few days as people were worried about the U.S. fiscal cliff," said Fang Junfeng, an analyst at Shanghai CIFCO Futures. "It could be building a bottom in the range between $7,600 and $7,800."
Grains futures also rebounded from lows, with Chicago Board Of Trade January soybeans rising 0.76 percent to $14.19-1/2 a bushel after sliding 2.09 percent on Thursday.
Soybeans are down about 5 percent for the week on signs of softer demand from top consumer China.
Private exporters reported the cancellation of 540,000 tonnes of U.S. soybeans sold to China - the biggest cancellation by the world's top importer of the oilseed in at least 14 years - the U.S. Agriculture Department said on Thursday.
Investors await the release of the U.S. Commodity Futures Trading Commission's weekly Commitments of Traders report later in the day. Last week's data showed speculators raised their bullish bets on copper and gold, cut their exposure to corn and slashed their net long U.S. crude futures and options positions
(Additional reporting by Rujun Shen in Singapore and Colin Packham in Sydney; Editing by MIchael Perry)