XAUUSD: Pullback may pave way for higher movementGold is showing a short-term recovery after reacting from the lower exhaustion area near 4,020. From Kelly’s view, the current structure is improving, with price now moving inside a rising channel and forming a possible bullish Elliott sequence.
The key idea is simple: gold is recovering, but the cleaner buy setup may come after a controlled pullback into the wave 4 buy zone.
⟡ Market structure
The chart shows gold bounced strongly after completing the previous downside move. Price has formed higher lows and is now trading around 4,109, showing that buyers are trying to rebuild short-term momentum.
However, the market is approaching the 4,124 sell wave 3 area, which can create a small rejection or correction before the next upside leg continues.
The 4,095 buy zone wave 4 is the key area to watch. If price pulls back into this zone and holds, the bullish recovery structure remains valid and gold may continue towards the wave 5 completion zone around 4,170.
➤ Key levels
◌ 4,095: buy zone wave 4 and key support
◌ 4,109: current reaction area
◌ 4,124: sell wave 3 / short-term resistance
◌ 4,170: wave 5 completion zone
◌ Below 4,095: area where the recovery setup weakens
◌ Below 4,060: area where the bullish structure needs reassessment
⌁ Elliott Wave view
From an Elliott Wave perspective, gold may be building a new bullish 5-wave recovery after the previous bearish sequence ended near the lower base.
Wave 1 started the first recovery push.
Wave 2 corrected but held above the recent low.
Wave 3 is now testing resistance around 4,124.
Wave 4 may form as a pullback into the 4,095 buy zone.
If buyers defend this zone, wave 5 may continue towards 4,170.
This is why Kelly would not chase the current push directly into resistance. The better structure is to wait for price to correct, hold support, then look for the next continuation wave.
▸ Trading scenario
Preferred scenario: wait for price to pull back into the wave 4 buy zone and show bullish confirmation.
Entry zone: 4,095–4,105 if bullish confirmation appears
Stop loss: below the confirmed wave 4 low or below 4,080
Take profit 1: 4,124
Take profit 2: 4,150
Take profit 3: 4,170
Alternative scenario: if gold breaks below 4,095 and fails to recover, the bullish wave structure weakens. In that case, price may return towards the lower channel area before building a new setup.
⌁ Kelly’s view
For Kelly, this is a bullish recovery structure, but still a pullback-buy setup rather than a chase-buy setup. Gold has already reacted well from the lower zone, but price is now close to short-term resistance.
The cleanest plan is to watch how gold behaves around 4,095. If buyers protect that area, the next upside wave may continue towards the wave 5 completion zone.
Gold is recovering step by step.
If the wave 4 buy zone holds, the next move may still point higher.
Share your view below.
Long