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XAUUSD — Wave 2 bounce hits resistance, seller pressure may return soon
Gold is moving into technically sensitive territory as the current recovery no longer looks like the start of a new uptrend.
Kelly believes the rally is best interpreted as a second wave of correction, with the market now approaching an area where sellers may begin to return.
These distinctions are important.
Because if this is indeed the second wave of retracement within a broader downward structure, then the next important move will not be a continuation higher, but the beginning of a third wave lower.
Technical structure
The chart still shows gold trading within a broader descending channel, maintaining a defensive mid-term structure.
The recent rebound has lifted the price into medium-term selling territory around 4812, but the market has yet to resume trend so far. It just retests the resistance.
This makes the current zone important for two reasons:
Price close to specific sales area
The rebound occurred on a higher time frame that was still bearish
Below current prices, structural highlights:
4794 as the nearest pivot area
4769 is the first confirmation level of renewed weakness.
4710 as next high liquidity support area
If this interpretation of Wave 2 is correct, a break below resistance should once again open the way to lower levels.
Read the Elliott Wave Theory
From Elliott’s perspective, the current trend is best suited for a second bounce after an initial bearish phase.
This means:
The first wave creates the first downward thrust
The current recovery has recouped some of the losses
If resistance continues, the next stage may be the lower wave 3, which is usually the stronger, more instructive wave segment.
This is exactly why Kelly will focus on the quality of the rebound and not just the fact that prices are rising.
A true bullish reversal would require a restoration of structure and a hold above resistance.
Wave 2 rallies, on the other hand, often look convincing at first, but lose momentum and fall sharply amid low supply.
Currently, the chart still looks closer to the second scenario.
The next important thing is
For Kelly, the next decision point was clear.
If the price of gold remains below 4812 and begins to slide below 4769, the second wave of rebound may be over or near the end.
This will strengthen the possibility of a third wave falling towards 4710 first.
If the sell-off expands from there, the structure could continue to extend to the downside.
On the other hand, if buyers clearly accept 4812 and hold above it, then the downward wave will lose quality and the market may require a different interpretation.
But for now, the price is still reacting below the resistance level – without breaking above it.
overall background
The macro aspect also supports a more cautious interpretation.
Political tensions surrounding the Federal Reserve and the risk of increasing instability in the Fed’s independence are adding to market uncertainty.
This keeps volatility high but does not automatically create an uptrend in gold.
For Kelly, overall risk explains price action.
Structure still explains the trends.
Read Kelly
This is a type of second wave sales chart.
The market is moving back, but it is doing so within specific resistance areas and a broader bearish structure.
This makes the current move more attractive as a corrective sell setup than as a breakout buy.
As long as prices remain trapped below 4812, Kelly’s preferred reading remains that gold is ending its second wave and is gearing up for further downside.
in conclusion
Gold is currently in rebound mode, but the move still looks corrective rather than impulsively bullish.
From Elliott’s perspective, this pullback is better suited for a second wave, and the current resistance area could become a place where sellers can regain control.
As long as the price remains below 4812, the bearish scenario remains active, with 4769 being the first signal and 4710 being the next bearish reference.
The rebound is visible – but if this is indeed a second wave, the more significant move may still be to the downside.
