Gold (XAUUSD) has shown significant price movements following a corrective phase that began at $4098.74 on March 23. After reaching a low on that date, the precious metal entered a rally characterized by a clear impulsive structure. The initial upward movement, identified as wave (1), peaked at $4890.97, after which a pullback designated as wave (2) settled at $4500.46. This observed movement was documented on a one-hour chart.
In the aftermath of this retracement, Gold embarked on another upward trajectory identified as wave (3). However, analysts note that for this bullish view to be validated, a definitive break above the previous peak of wave (1) at $4890.97 is necessary. From the low of wave (2), wave (1) further progressed to a new level, capping at $4764.73.
Currently, the unfolding of wave (2) indicates a corrective phase intended to address the cycle initiated on May 5, 2026. The internal mechanics of this wave are taking shape in what is known as an expanded flat formation within the Elliott Wave framework. The decline from wave (1) saw wave ((a)) culminate at $4647.71, followed by wave ((b)), which completed at $4773.58. At present, the market is in the process of wave ((c)) within the second corrective wave, which is progressing downward in a decisive manner, with expectations of potentially revisiting the $4500.46 level before the anticipated advance.
It is critical to note that this current decline is framed as a corrective movement rather than a reversal of the overarching trend. For traders and market participants, the pivotal reference point remains the $4500.46 low. As long as this threshold holds, expectations lean towards a resumption of the upward cycle post-correction.
In summary, while Gold is currently consolidating within a corrective pattern, the overarching impulsive bias persists. Close attention is warranted on the completion of wave ((c)), as this milestone is expected to set the groundwork for the next bullish phase in the market.
