* Bond prices fall as stocks regain bid * Hopes on fiscal cliff increase risk taking, reduce bond demand * Volumes light ahead of Thanksgiving holiday By Karen Brettell NEW YORK, Nov 19 (Reuters) - U.S. bond prices fell on Monday as signs of progress in talks between the Congress and the administration to resolve a fiscal crisis caused by large, automatic budget cuts and tax increases boosted demand for riskier assets including stocks, making safe-haven bonds relatively less attractive. In the past two weeks Treasuries yields have fallen to two-month lows as investors fled stocks on concerns that U.S. lawmakers would fail to reach a deal to resolve the $600 billion "fiscal cliff," significantly dampening economic growth. Stocks investors appeared more confident on Monday, however, after leading Republican and Democrat lawmakers expressed confidence on Sunday that they could reach a deal, even as they stuck to their positions. "There have been signs of life. I think the big possibility to watch for is how much of a recovery we can create in equities, and then how long that holds," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee. Bonds are largely taking their cues from other markets as investors wait on new information relating to any economic effect of recent storm Sandy, the resolution of the fiscal cliff and before the Federal Reserve's next policy meeting in December, he said. "There's no fundamental bond story at the moment that can be aggressively traded, which leaves us to react to other markets," Vogel said. A number of other factors including any renewed concern about Europe's debt crisis and rising tensions in the Middle East are expected to keep a bid for bonds, likely limiting yield increases. "There are a lot of variables, I don't think we are going to go anyplace soon," said Sean Murphy, a Treasuries trader at Societe Generale in New York. There was greater optimism on Monday that Euro zone leaders will agree to release much-needed aid for Greece. European officials are expected to discuss a two-year funding plan for Athens at a meeting on Tuesday, which would postpone any longer-term solution until after a September 2013 German general election. Some investors may also be reluctant to take new positions as risk aversion rises heading into year-end, which could increase price volatility. "There is a reluctance to get involved given how many factors are influencing the market. The European situation should be enough to contain prices, but we could see slightly higher rates in the near term if we get a positive resolution on any of those fronts," said Murphy. Trading volumes are also expected to be light this week with no important economic releases due and before the U.S. Thanksgiving holiday on Thursday. Benchmark 10-year Treasuries were last down 12/32 in price to yield 1.63 percent, up from 1.58 percent on Friday. The yields have fallen from 1.75 percent on Nov. 6. Thirty-year bonds fell a point in price to yield 2.78 percent, up from 2.73 percent late on Friday.