XAUUSD: Wave 5 Recovery Meets the Sell Zone

Gold is pausing after a strong three-day recovery, and price is now reacting around the 4,319–4,330 sell wave C zone. From Kelly’s view, the current structure suggests that the latest upside move may be entering the final part of wave 5, where the market needs confirmation before any further continuation.

The key idea is simple: gold has recovered strongly, but price is now testing a sensitive resistance area while macro uncertainty is rising again.

⟡ Market structure

Gold pushed higher after defending the lower base near 4,026–4,053, then built a clean bullish sequence towards the current resistance area. The recovery has been strong, but price is now slowing under the sell wave C zone, which makes this area important for the next directional decision.

The chart also shows Fibonacci reaction zones below price. If gold fails to hold above the current resistance, the market may correct back towards the 0.618 Fibonacci area near 4,243, then the 0.5 liquidity zone around 4,202.

➤ Key levels

◌ 4,319–4,330: sell wave C zone and current resistance
◌ 4,243: 0.618 Fibonacci buy scalping zone
◌ 4,202: 0.5 Fibonacci buy liquidity zone
◌ 4,109–4,120: lower target and deeper support
◌ Above 4,330: area where the sell wave C setup weakens

⌁ Elliott Wave view

From an Elliott Wave perspective, gold appears to be completing a short-term wave 5 recovery after the previous bullish structure developed from the lower zone.

Wave 1 started from the 4,026 area.
Wave 2 corrected into the lower base.
Wave 3 expanded strongly towards the upper range.
Wave 4 held above liquidity support.
Wave 5 is now testing the sell wave C resistance area.

If wave 5 finishes around the current zone and price prints bearish confirmation, gold may start an A-B-C corrective pullback towards 4,243 first, then 4,202 if selling pressure expands.

▸ Fundamental backdrop

Gold is pausing as traders become more cautious after the earlier optimism around the temporary US-Iran peace agreement and the reopening of the Strait of Hormuz started to fade.

At the same time, the market is watching the upcoming Fed decision closely. If the US Dollar continues trying to fill Monday’s bearish gap, gold may struggle to extend higher in the short term.

Geopolitical risk is still present, especially with tension around Israel and Lebanon, but the market is not treating the peace narrative as fully secure yet. That keeps volatility elevated and makes confirmation more important than chasing price.

▸ Trading scenario

Preferred scenario: wait for reaction around the 4,319–4,330 sell wave C zone.

Sell reaction zone: 4,319–4,330 if bearish confirmation appears
Stop loss: above the confirmed wave 5 high
Take profit 1: 4,243
Take profit 2: 4,202
Take profit 3: 4,109–4,120

Alternative scenario: if gold breaks above 4,330 and holds with strong acceptance, the wave 5 sell setup loses quality, and price may continue extending before forming a new structure.

⌁ Kelly’s view

For Kelly, this is not a clean place to chase the upside. The recovery has already travelled far, and price is now testing a zone where wave 5 may be close to completion.

The better approach is to watch how gold reacts around 4,319–4,330. If rejection appears, the market may shift from recovery into correction.

Gold is still holding its rebound.
But structurally, wave 5 may be approaching the point where sellers start testing control again.

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