* Gold rebounds from two-week low after U.S. payrolls data
* U.S. employers added far fewer jobs than expected in Sept
* Silver posts strongest gains so far in 2015 (Adds comment and updates prices)
By Luc Cohen and Jan Harvey
NEW YORK/LONDON, Oct 2 (Reuters) - Gold jumped more than 2 percent on Friday and silver surged over 5 percent for its best day this year as weaker-than-expected U.S. jobs data dented expectations the U.S. Federal Reserve will raise interest rates this year, triggering short-covering.
Investors raced to cover bearish short bets and some put on new longs after U.S. Labor Department data showed payrolls outside of farming rose by 142,000 last month, much lower than the 203,000 expected.
The data lifted prices off two-week lows, fueling concerns that a China-led global economic slowdown is sapping U.S. economic strength and reinvigorating the moribund bullion market that had been rangebound for months.
Traders had braced for a long-expected U.S. rate hike, the first in almost a decade, later this year, which could hurt demand for non-interest-paying gold while boosting the dollar.
"Today could be a game-changer, because nobody expected this sort of a jobs report," said George Gero, precious metals strategist for RBC Capital Markets in New York.
Turnover in December futures in the half-hour after the release pierced 4.8 million ounces, worth about $5.5 billion, the highest for a 30-minute period in over a year.
While much of the volume was likely due to short-covering, "some people are starting to dip their toes in for long positioning too (for a rate hike)," said Bart Melek, head of commodity strategy for TD Securities in Toronto.
Spot gold was up 2.1 percent at $1,136.40 an ounce at 2:58 p.m. EDT (1858 GMT), after rising 2.5 percent to a session high of $1,141.50. U.S. December gold futures GCv1 settled up $22.90 an ounce, or 2 percent, at $1,136.60.
Prices were down 0.8 percent on the week.
Decent volume in November and December put options, which give the holder the right to sell at a strike price of $1,100 an ounce, suggested investors were protecting their downside risk and hedging their new long futures positions, traders said.
Silver XAG= jumped 5.6 percent to $15.27 an ounce, hitting two-week highs for its biggest one-day gain since December.
U.S. stock markets rebounded from early losses after the poorer-than-expected U.S. jobs numbers, while the dollar fell to a two-week low against the euro.
Among other precious metals, platinum XPT= recovered to $905.24 an ounce, up 0.6 percent, after slumping to $888, its lowest since December 2008.
Palladium XPD= was up 3.3 percent at $695.97 an ounce, just off three-month highs at $697.