Gold surges to record after weak US jobs data

By Carole Vaporean and Pratima Desai

NEW YORK/LONDON (Reuters) - Gold surged to a record high above $1,100 an ounce on Friday as investors sought safety after data showed the U.S. unemployment rate unexpectedly jumped to 10.2 percent in October.

While doubts about an economic recovery boosted gold, other precious metals with an industrial component fell, their demand outlook dented.

"Gold rallied early on the unemployment numbers being higher than expected. It fueled thoughts of additional stimulus and reinforced the concept that the Fed will not be able to raise rates any time soon," said Frank McGhee, head precious metals trader at Integrated Brokerage Services in Chicago.

U.S. employers cut 190,000 jobs in October, greater than the 175,000 fewer jobs forecast, and the unemployment rate rose to 10.2 percent, a 26-1/2-year high that was above average forecasts of a 9.9 percent rate.

Dealers said gold still enjoyed support from prospects of central banks buying the yellow metal to diversify reserves.

"The market has the bit between their teeth -- all these investors have piled into gold in a quasi-physical sense and now they are being supported in that by the actions of Mr Central Bank," said RBS metals analyst Stephen Briggs.

Gold hit a record high at $1,100.90 per ounce, up more than 25 percent this year.

By 3:45 p.m. EST (2045 GMT), it was bid at $1,096.65 a troy ounce from $1,089.55 late in New York on Thursday.