Nov. 7 (Bloomberg) -- Gold rose for the first time in three days in London as the U.S. unemployment rate climbed to the highest since 1994, increasing the appeal of the metal as a haven against deepening economic gloom.

Gold also gained as the dollar weakened. Employers cut 240,000 workers last month, after 284,000 in September, the biggest two-month slump since 2001, the U.S. Labor Department said. The jobless rate leapt to 6.5 percent.

``Concerns regarding the global financial system and economy'' are boosting bullion, Mark O'Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin, wrote in a note. Bullion may reach ``$800 an ounce in coming days as safe haven buying reemerges.''

The metal for immediate delivery advanced as much as $12.04, or 1.6 percent, to $744.89 an ounce and traded at $736.03 by 2:46 p.m. in London. December futures gained $3.30 to $735.50 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange.

The dollar fell against the euro and British pound following the U.S. jobs report and as traders bet the Federal Reserve will cut borrowing costs to 0.5 percent on Dec. 16, compared with the European Central Bank's current benchmark rate of 3.25 percent.

Gold is also heading for its first weekly gain in a month, climbing 2.3 percent in the past five days. The metal fell to $742 in the morning ``fixing'' in London used by some mining companies to sell production, from $754.50 at the previous afternoon fixing.

Gold Trust

The metal has dropped 29 percent since touching a record $1,032.70 an ounce in March.

Gold in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, added 36 metric tons in October. The fund held steady at 749.2 tons yesterday, according to figures posted on the company's Web site.

Silver climbed 0.7 percent to $10.05 an ounce. Futures in silver may rise in the next six months to near the record $21.44 an ounce set in March as investors seek out the metal as a haven, according to New York-based commodity adviser CPM Group.

Among other metals for immediate delivery, platinum jumped $18, or 2.2 percent, to $854.50 and palladium was $5, or 2.3 percent, higher at $225.75 an ounce.

Anglo Platinum Ltd., the world's biggest platinum producer, said it is still supplying customers from its Polokwane smelter in South Africa after an accident on Nov. 5. The company said the incident may cut output by as much as 200,000 ounces this year.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

Last Updated: November 7, 2008 09:59 EST