Mumbai: Indian gold futures moved sideways on 5 July with little change in international prices and a strengthening rupee, commodity brokerages said.
But all eyes were on the Bank of England (BoE) and European Central Bank (ECB) that could move prices with their decisions on their respective interest rates later in the day, brokerages said.
“The market is expected to continue moving sideways till the BoE and ECB announcements come in,” said a senior analyst at Anand Rathi Commodities.
The analyst said if the BoE raises rates, as it is expected to do, the dollar could weaken and as a result push gold prices up.
The dollar and gold traditionally have an inverse relationship as investors drop one for the other depending on their appeal.
Another analyst warned of intraday volatility ahead of the interest rate decisions.
“Buying is advised only if the price sustains itself above Rs8,700 (per 10 grams),” said Pradeep Unni, assistant vice-president, commodity research at Vision Commodity Services DMCC.
Unni said he expected the August contract on the Multi Commodity Exchange of India (MCX) to have support at Rs8,636 and resistance at Rs8,682.
Open interest on the August MCX was at 13,264 lots, slightly changed from 13,277 the previous day. Volume on Wednesday, 4 July, was at 3.78kg.