MUMBAI (Reuters) - Analysts presented a mixed outlook for gold this week on Monday, though they agreed the metal's bull run was likely to be intact in the near term.
"I see a fall this week on a much needed correction because of the way it went up," said T. Gnanasekar, director at Commtrendz Research. "But expectations of a rate cut in the U.S. is likely to make it rally again."
Indian gold prices moved in tandem with the overseas markets, where the metal hit a 28-year high on Friday at $770 an ounce. On Monday, markets softened on profit taking and at 5:00 p.m., international spot gold was at $748.60.
In the local market, gold futures on the Multi Commodity Exchange of India Ltd. hit a year's high of 9,950 rupees per 10 grams on Oct. 17.
"After its major rally last week, gold has not corrected much, so it may fall some more," said Kishore Narne, vice president at Anand Rathi Commodities.
Both Narne and Gnanasekar said dips from current levels could be buying opportunities as the market is likely to rally again in the next couple of weeks.
Lack of good physical demand in India as well other world markets is a concern, another analyst said.
"It remains to be seen how much gold must drop in order to attract the physical buyers," said Pradeep Unni, assistant vice president, commodity research at Vision Commodities Services DMCC.
Few U.S. economic indicators are expected this week, including home sales and consumer confidence data, but markets are eyeing the Oct 31 Federal Reserve interest rates meet.
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