Gold hits record above $1,100/oz as dollar slides

By Jan Harvey

LONDON (Reuters) - Gold hit a record high above $1,100 an ounce in Europe on Monday as the dollar slid on expectations U.S. interest rates will remain low, boosting interest in the precious metal as an alternative asset.

Spot gold reached a peak of $1,108.55 an ounce, and was bid at $1,106.55 an ounce at 0937 GMT, against $1,096.30 late in New York on Friday.

The precious metal extended last week's near 5 percent gains, when fund buying took it to a series of record highs in the wake of India's central bank buying 200 tonnes of gold from the International Montary Fund and the dollar weakening further.

"Gold is unstoppable," said Michael Kempinski, a senior trader with Commerzbank. "The forex market helps, and technically it seems pretty good. And as we know, funds like to take more in on the highs to push (prices) further."

U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $13.10 to $1,108.80 an ounce.

The dollar weakened broadly on Monday after a G20 meeting and U.S. jobs data did little to alter the view that U.S. interest rates will stay low for the foreseeable future, offering little incentive to buy the currency.

Weakness in the U.S. unit tends to benefit all dollar-priced assets, as it makes them cheaper for other currency holders.

Other commodities also rose, with industrial metals climbing across the board and oil prices rising more than $1 a barrel. Strength in crude prices often helps support gold, which can be used as a hedge against oil-led inflation.