XAUUSD by Lilybelle_gl — TradingView

market analysis

After a strong reaction from the recent bottom, gold is showing signs of continuing its rise in the fifth Elliott Wave. Chart-wise, the price has completed a sharp decline phase, then formed a recovery structure, and now looks like an impulsive move to the upside.

What’s worth noting here is that the market held above short-term rising support while establishing a series of higher highs. This suggests buyers are gradually regaining control and that the current structure may still have room to expand before facing more serious rejections.

From a Fibonacci perspective, the next significant upside target lies around 1,618, a level near 4,968, a level that is also closely aligned with the strong psychological zone around 5,000. This creates a very important area of ​​overlap and makes it a prime target area to see if binge eating structures persist.

Before reaching this higher target, the price may face resistance near 4601, which is showing as strong resistance on the chart. A clear breakout of this area would reinforce the case for a continued uptrend and open the way to target areas above.

Another interesting detail here is the size difference. When price recovers and attempts to extend its advance, volume does not expand in a completely aggressive manner. Meanwhile, the previous decline was accompanied by stronger selling activity. This creates a divergence-like situation: price is rising, but volume is not confirming the move with the same force. In my opinion, this does not directly invalidate the poly setup, but it does suggest that the current uptrend may be led more by a structural recovery than outright certainty buying. This means the market is likely to move higher, but traders should remain vigilant if the price approaches significant resistance.

So, in this case, the structure still supports the move higher, but the volume action reminds us to be careful not to view the rebound as a completely one-sided bullish breakout.

Key price areas to watch

Current price range: around 4493
Short-term support line: still ongoing
The first strong resistance: 4601
Main upside target: 4968
Psychological resistance zone: around 5,000

My scenarios and strategies

My preferred scenario is to follow the current structure as an active pullback in the fifth wave as long as the price continues to obey the rising support line.

If gold prices continue to find support above the current structure and break above 4601, the upward path may open further towards the 1.618 Fibonacci level of 4968, which is also located near the important psychological area of ​​5000. This area will likely serve as a prime target for this bullish leg.

However, I would also remain cautious when price approaches resistance as volume has yet to fully confirm the recovery and strong expansion. If momentum begins to wane near a target area, that area may trigger a stronger reaction.

If price loses its rising support line and fails to sustain a sequence of higher highs, the upside continuation structure will weaken and the market may return to a broader consolidation phase before attempting another directional move.

This is the setup I’m monitoring right now. Thank you for reading and always manage your risks carefully.