According to chairman Karachi Saraf Association, Haji Haroon Chand, investors are buying gold amid the fears of possible US default on its foreign debt.

He said that locals are buying gold in the expectation of further rise in its prices in Pakistan.

Bullion's tola (11.664 grams) price also escalated by Rs500 to Rs51,900.

Silver also closed higher at Rs1,080 per 10 grams.

Copyright APP (Associated Press of Pakistan), 2011