COMMODITIES-Gold hits peak, oil slumps on debt, growth fears

* Oil slides on fears of global economic slowdown

* U.S. rating downgrade, Europe debt crisis weigh

* More commodity losses expected on risk aversion (Adds quotes, updates prices)

By Eric Onstad and Manolo Serapio Jr

LONDON/SINGAPORE, Aug 8 Gold soared to an all-time high on Monday as investors sold off other commodities from oil to grains, fleeing from riskier assets after the U.S. loss of its prized AAA credit rating stoked fears about economic growth.

Gold broke through the $1,700 per ounce barrier for the first time, extending its bull run as a safe haven asset after agency Standard & Poor's (S&P) cut its rating for U.S. debt late on Friday.

Oil was hard hit, sliding over 4 percent, while industrial metals and agricultural commodities piled up losses as a deepening debt crisis in the United States and Europe fanned worries that a global slowdown would erode demand for raw materials.

A move by the European Central Bank to intervene in Spanish and Italian bond markets coupled with a pledge by G20 members to take action to ensure market stability helped steady markets and limit the downside, but most commodities were expected to see more losses.

"In the short term investors will be very careful," said Pau Morilla-Giner, head of commodities and senior portfolio manager at London & Capital.

"You're going to see a very high correlation with risk assets because there's still a perception that commodities are cyclical and the only area that will perform differently is the gold space."

Commodities with supply issues such as copper and corn were still attractive in the longer term, Morilla-Giner said, and investment bank Goldman Sachs maintained its overweight recommendations on commodities relative to other assets.

The Reuters-Jefferies CRB index , the 19-commodity benchmark, shed 1.3 percent after losing nearly 4.5 percent last week, its steepest drop since a rout in early May fuelled by concerns about a stalling global economic recovery.

Benefiting from the gloom, gold climbed to an all-time high above $1,715 an ounce, its 11th record in 19 sessions, as investors snapped up the precious metal. Gold has gained more than 20 percent so far this year.

"Everyone was talking about Armageddon at the weekend and this morning, it's held the rot but doesn't remove the themes that have been driving the stock markets," said Saxo Bank senior manager Ole Hansen.

World shares tumbled and the euro extended losses against the dollar while the ECB action gave some respite to battered bond markets.

Investors have bought more gold in the last month than in the prior six months, based on the increase in open interest on the COMEX market from speculators and money managers, as well as inflows into exchange-traded products.

Dominic Schnider, executive director for wealth management research at UBS, said gold may even be headed to $2,000 per ounce.

Oil suffered steep losses as worries over global growth hit markets.

"Chances of a double-dip recession have increased over the last week," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. "I still don't think another recession is a probability, but economic growth forecasts are being lowered."

U.S. crude oil futures CLc1 slid as low as $82.52, down 5.0 percent, marking its sixth loss in seven sessions, but recovered to $84.20 by 1335 GMT. Brent crude LCOc1 shed as much as 3.6 percent to $105.43 a barrel before also paring losses.

U.S. oil is down around 7 percent this year compared with a rise of 15 percent last year while Brent has gained 13 percent against an increase of 22 percent last year.

Fears about a global slowdown also hit industrial metals as copper fell to a five-week low.

Copper on the London Metal Exchange fell as low as $8,950 a tonne, down 1 percent, its lowest since June. The metal used in power and construction tumbled by 7.9 percent last week, in its largest weekly fall since June 2010.

Copper later recovered to trade 0.1 percent higher, showing resilience amid the sell-off, supported by tight global supplies and investor bets on China's growth.

"With many markets pricing more fear than fundamentals at the moment, buyers may still be a bit cautious," analyst Duncan Hobbs of Macquarie said.

"Unless you needed to buy physical material today, looking at the short-term trajectory of exchange-traded commodities, you might think, 'I would have a better chance to buy if I hold off a little while.'"

Tin slumped as much as 8 percent to $22,400 a tonne, its weakest since last September.

In agricultural markets, U.S. and European grain futures fell sharply after holding up relatively well during investor sell-offs last week, supported by concerns over the U.S. corn crop after hot weather last month.

"It is more of a macro story today, it is continued flight to safety and that suggests outflow of capital from agricultural commodities," said Brett Cooper, a senior markets manager at FCStone Australia. I think the market has probably priced in much of the fundamental news at the moment."

Losses were tempered ahead of a government report later this week that will shed light on U.S. corn and soybean crops after heat stress last month. (Additional reporting by Melanie Burton, Amanda Cooper, Christopher Johnson and Lewa Pardomuan; Editing by Clarence Fernandez and Alison Birrane)