XAUUSD: Weekly ABC recovery ongoing.◈ XAUUSD: Weekly ABC Recovery Is Still Developing
Gold is showing a corrective recovery after reacting from the lower base around 3,980–4,000. From Kelly’s view, the current structure is developing as an Elliott ABC recovery, with price now holding above the 4,042 buy zone and trying to build momentum for the next upside leg.
The key idea is simple: the broader trend is still fragile, but the short-term recovery structure remains valid while gold holds above the buy zone.
⟡ Market structure
The chart shows gold rebounding from the lower accumulation area after a strong bearish move. Price formed the first recovery leg, pulled back into support, and is now attempting to continue higher from the 4,042 area.
The current reaction around 4,058 suggests buyers are still defending the short-term structure. If this support remains valid, gold may continue developing wave C towards the next Fibonacci resistance zone.
The first important upside area is around 4,125, where the chart marks a Fibonacci sell zone. If price breaks above this area with strength, the recovery could extend further towards 4,213.
➤ Key levels
◌ 4,042: buy zone and current support area
◌ 4,058: current reaction zone
◌ 4,095–4,100: short-term resistance checkpoint
◌ 4,125: Fibonacci sell zone and first major target
◌ 4,213: possible wave 5 completion / upper weekly target
◌ Below 4,042: area where the ABC recovery weakens
⌁ Elliott Wave view
From an Elliott Wave perspective, gold appears to be forming a weekly ABC recovery after completing the previous bearish impulse.
Wave A created the first rebound from the lower base.
Wave B corrected back into the buy zone and held above support.
Wave C may now be developing from the 4,042 area, with the first target near 4,125.
If wave C expands with stronger momentum, the move could transform into a broader 5-wave recovery, opening the path towards the 4,213 area.
However, if gold loses 4,042 and fails to reclaim it, the ABC structure becomes weaker and the market may need to form another base before recovery can continue.
▸ Trading scenario
Preferred scenario: wait for gold to hold above the 4,042 buy zone and continue building the ABC recovery.
Entry zone: 4,042–4,060 if bullish confirmation appears
Stop loss: below the confirmed reaction low or below 4,020
Take profit 1: 4,095–4,100
Take profit 2: 4,125
Take profit 3: 4,213 if wave C expands strongly
Alternative scenario: if gold breaks below 4,042 with clear bearish pressure, the weekly ABC recovery loses quality and price may return to the lower accumulation area before building a new structure.
⌁ Kelly’s view
For Kelly, this is a recovery setup, but still not a full trend reversal. Gold is trying to build an ABC structure from the lower zone, and the buy area around 4,042 is the key support to protect.
If buyers continue defending this area, the next weekly move may target 4,125 first, then 4,213 if momentum improves.
Gold is recovering from the lower base.
The ABC structure remains active while the buy zone holds.
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