Gold\u2019s short-term Elliott Wave count for XAUUSD frames the move from the 25 August 2026 high as a zigzag correction. Wave A ended at $4,282.23, then wave B retraced higher to $4,509.59 before the market turned lower into wave C. This leg is being treated as a five-wave impulse, keeping the broader corrective structure in place.<\/p>\n\n
From the wave B peak, wave ((i)) reached $4,252.70 and wave ((ii)) rebounded to $4,399.58, forming an expanded flat. The decline then extended into wave ((iii)), which is itself unfolding in a five-wave sequence of smaller degree: wave (i) finished at $4,243.94, followed by wave (ii) topping at $4,315.82, before price pushed down again into wave (iii) of ((iii)). The $4,509.59 pivot remains the reference point; while it holds, rallies are projected to fail in either three or seven swings, setting up further downside towards completion of the zigzag.<\/p>\n\n
We advise derivative traders to adopt a defensive, sell-on-rally approach for Gold (XAUUSD) over the coming weeks as corrective downward pressure intensifies. The current price action confirms that the metal is locked in a bearish zigzag pattern after peaking in late August. We believe traders should look to establish short positions on temporary price bounces, as the short-term momentum clearly favors the bears.<\/p>\n\n
To manage risk effectively, we recommend placing stop-loss orders just above the critical resistance pivot of $4509.59. Any corrective rallies in three or seven swings are highly likely to stall below this level before resuming the downward trend. Utilizing bearish options strategies, such as buying near-term put options, can help capitalize on this expected slide while strictly capping risk.<\/p>\n\n
This technical pullback aligns with historical market behavior, where gold frequently undergoes 5% to 10% corrections following rapid, multi-month surges. While long-term demand remains supported by global central banks\u2014which purchased a net 1,037 tonnes of gold in a single year according to World Gold Council data\u2014the short-term derivative market is currently overbought. We expect this wave of profit-taking to persist through October, presenting a prime window for tactical short sellers.<\/p>\n\n\n\n