Gold may hit $610 but Indian demand will glitter

World gold prices are likely to rise to $610 an ounce by March/April, but this is unlikely to deter Indians from importing the same amount.

World gold prices are likely to rise to $610 an ounce by March/April, but this is unlikely to deter Indians from importing the same amount of the precious metal in 2006 as last year, the head of the country's leading bullion trade body said on Wednesday.

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Mukul Sonawala, president of the Bombay Bullion Association, said gold could see a small correction before it rises again. He said a price of $540 per ounce would provide a buying opportunity.

"There is inherent strength in the market," Sonawala told Reuters in an interview. "All the fundamental factors are pointing to that."

Gold rose to $572.20 on Tuesday -- its highest since January 1981 -- on fund buying sparked by fears of rising energy costs and tensions in the Middle East over Iran's nuclear ambitions.

On Wednesday, spot gold was $567 an ounce.