KARACHI, Jan 24: Gold prices on the local bullion market on Friday soared to a record high of Rs6,905 per ten grams owing to panic buying triggered by fears of Iraq war and slow down in arrivals from the overseas sources.

The prices have risen by Rs69 per ten grams in line with the stock market crash as a section of investors opted for the yellow metal after selling their stake in the share business.

Never before in the trading history of the gold including Indo-Pak war or the US attack on Afghanistan, prices have risen to such a record high.

“The weakness of the US dollar and heavy unloading in it is cited another reason for the current bull-run on gold,” bullion dealers said adding “everyone is out to have it for unspecified reasons.”

Indications are that prices may maintain their upward trend as supplies are too short partly because of reported hoarding, to meet the rising daily demand, they added.

Reuters adds from London: Gold hit fresh six-year highs in European trade on Friday as prospects for war in Iraq, a sickly dollar and stock market losses provided a bullish cocktail for the safe-haven metal.

Spot gold was quoted at $365.90/366.70 an ounce at 1513 GMT, up from last quoted $364.50/365.00 in New York on Thursday when it hit a new six-year high of $367.60.

The precious metal, which acts as an insurance policy at times of looming war, fragile stock markets and a weakening dollar, is 30 per cent higher than at this time last year.