Bank of Japan Retains Warning on Inflation Overshoot Risks
On Friday afternoon, sources revealed that the Bank of Japan (BOJ) is expected to maintain its warning over consumer price risks exceeding its 2% target during its upcoming monetary policy meeting on July 30–31, while signaling that such risks have not widened significantly compared to three months ago.
In its forthcoming quarterly outlook report, the central bank will highlight lingering inflation concerns stemming from Middle Eastern geopolitical tensions, robust global artificial intelligence (AI) demand, and elevated import costs driven by a weak yen.
Although anxiety regarding a severe inflation overshoot has moderated compared to April's assessment, and the central bank is anticipated to hold benchmark interest rates steady at 1% in July, sources indicate that policymakers are shifting attention toward the extent to which businesses continue passing rising costs on to consumers.
Market consensus broadly anticipates that the BOJ is highly likely to implement another 25-basis-point rate hike to 1.25% between October and December this year. The continuation of the BOJ's hawkish stance echoes the hawkish monetary policy tone maintained by both the Federal Reserve and the European Central Bank for the second half of the year.
Price Action Stages Sharp V-Shaped Rebound Following Afternoon Lows
As of approximately 16:36 Beijing time on July 24, spot gold was trading at $4,049.29 per ounce, with intraday losses narrowing dramatically to 0.01% (down a minor $0.22), rapidly rebounding nearly $30 from the afternoon trough of $4,021.92 per ounce.
High-Volume Afternoon Dip Forms Localized Floor: Gold opened today at $4,048.26 per ounce, refreshing its intraday low at $4,021.92 between 10:30 and 13:30 Beijing time.
Late Afternoon V-Shaped Rally Takes Off: Upon testing the $4,021.92 low, short-term selling pressure reached temporary exhaustion, triggering a wave of dip-buying and short-covering inflows. From 13:45 onward, candlesticks printed consecutive green bars in a steep, vertical upward surge, touching a localized peak of $4,053.63 per ounce. Price action is currently trading firmly above all three major moving averages, with the short-term moving average cluster curving upward.
Short-Term Technical Indicators Turn Bullish amid Localized Overbought Signals
According to 15-minute technical indicator data as of 16:36, gold's steep afternoon rally reversed overall technical ratings from "Strong Sell" at noon to "Buy" (4 bullish metrics, 2 neutral, 3 bearish), releasing accumulated short-term bullish momentum.
Core Oscillators Rebound from Depressed Levels: The Relative Strength Index RSI(14) recovered steadily toward 46.538 into neutral territory, while the Commodity Channel Index CCI(14) registered 69.5684 with an active buy hint. Highs/Lows printed 5.2214, ROC read 0.228, and Bull/Bear Power registered 10.416, with all metrics flipping positive to confirm volume support behind the rebound.
Sensitive Indicators Reach Extreme Overbought Zone: The more sensitive Stochastic RSI Fast reads 100.000, while the Williams Percent Range(14) stands at -7.783, pushing both directly into extreme overbought territory. This indicates that while short-squeezing momentum remains strong, following a rapid $30 surge, price action touching $4,053.63 may require localized consolidation and technical backtests toward moving average support.
Medium-Term Indicators Await Further Technical Repair: The Average Directional Index ADX(14) stands at 57.621 in neutral territory, while the MACD Level reads -15.38, retaining a minor sell signal. This demonstrates that the larger-timeframe downward channel has not been entirely reversed by today's V-shaped bounce, with further upside potential contingent on capital follow-through following the US market open.
Future Outlook for Gold
Overall, the implementation of new US tariffs alongside persistent "inflation and rate hike" expectations continue to cast a macro shadow over medium-term gold trends. However, the robust buying support demonstrated at $4,021.92 underscores that bullish defensive lines retain considerable resilience.