* U.S. jobs report sends markets on roller-coaster
* Central banks said to be lining up to buy gold
* SPDR's gold holdings slip
(Recasts, adds comment, detail, updates prices)
By Pratima Desai and Veronica Brown
LONDON, Nov 6 (Reuters) - Gold surged to a record high above
$1,100 per ounce on Friday as investors pounced on the metal in
volatile trade after data showed U.S. employers cut a
bigger-than-expected 190,000 jobs in October.
Dealers also said the market continued to find residual
support from the prospect of central bank buying of gold to
diversify their 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.
The precious metal hit a record high at $1,100.90 per ounce
earlier, having gained more than 25 percent this year.
By 1514 GMT, it was bid at $1,097 a troy ounce <XAU=>
from $1,089.55 late in New York on Thursday.
The trigger for the surge this week was news that the
International Monetary Fund had sold 200 tonnes of gold to the
Reserve Bank of India for $6.7 billion. []
"People are focusing on pent up demand for gold from central
banks in emerging markets," said Michael Lewis, head of
commodities research at Deutsche Bank.
"The central bank community for the first time in 20 years
is possibly going to be a net buyer of gold having been a net
seller since 1988 ... Today the market will also focus on the
U.S. jobs data and how the dollar reacts."
WEAK JOBS DATA
Data released earlier showed the U.S. unemployment rate rose
to 10.2 percent, the highest in 26-1/2 years, as employers shed
190,000 in nonfarm payrolls in October.
The dollar initially rose as investors were at first risk
averse after the numbers, but as U.S. stock market indexes
turned positive the greenback fell against the euro <EUR=> and a
basket of currencies. <.DXY>. [] []
A weaker U.S. dollar makes commodities cheaper for holders
of other currencies, while gold is often used by investors as an
alternative to the dollar.
Gold rallied $25 on Tuesday, largely driven by India's
purchase of gold from the IMF, which soothed investor nerves
about possible oversupply.
"Most central banks outside of the US and Europe have low
gold reserve ratios," Calyon said in a note.
"Those central banks with low reserve ratios and are keen to
diversify into gold, notably those located in Asia, will be
potential candidates to buy the remainder of the IMF's 203.3
tonnes of gold in an off-market purchase."
The high chances of Asian central bank gold purchases were
reinforced by Sri Lanka, which said on Thursday it had been
buying gold for the last five or six months.
Linked in with this is the dollar, which central banks will
sell when they switch to gold from U.S. Treasuries.
However, some think Asian central banks may not hurry to
follow India's lead given current record prices and the
availability of cheaper domestically produced gold.
[]
"Indian buying was very significant, but those getting
excited about the potential for copy cat moves need to consider
a number of factors," said David Thurtell, analyst at Citi.
"Culturally, India is more favourably disposed to gold than
every other country. Second, it might be politically dangerous
to be accumulating reserves at the all-time price high."
The central bank story has offset some selling by investors
as seen in the world's largest gold-backed exchange-traded fund,
SPDR Gold Trust <GLD>.
SPDR's holdings fell 0.055 tonnes to 1,108.344 tonnes on
Thursday, marking the first decline since Oct. 30.
Silver <XAG=> was bid at $17.48 from $17.37 late on
Thursday, platinum <XPT=> at $1,349 from $1,353.50 and palladium
<XPD=> at $329.50 from $328.50.
(Editing by Sue Thomas)
