After qualifying the hard way for the Cup quarter finals with a morale-boosting win over Fiji on day one, Wales met South Africa early on day two full of confidence.
But in a see-saw encounter, Wales were edged out by four tries to three with South Africa triumphing 28-21. Springbok flyer Cornal Hendricks proved the difference as his two tries guided South Africa into the semi-finals.
Llandovery winger Chris Knight, who enjoyed a superb tournament in Australia, was again on the score sheet in reply but further tries from Rhys Jones and Lee Williams could not get Wales back into the game.
Defeat to South Africa saw Wales move into the Plate semi-finals, Kenya their next opposition. One of the most rapidly improving sides on the IRB circuit, Kenya have plenty of threats with ball in hand but in the early exchanges, Wales were more than solid in defence.
The first five minutes was a cagey affair but when Kenya went down to six men following a yellow card, Wales struck.
Captain Adam Thomas was the scorer, Rhys Jones converting for a 7-0 lead. Sadly for Paul John's side, that was as good as it got as Kenya fought back to claim 12-7 win.
After half time, the game was still closely fought but tries from Oscar Ouma and Felix Ayange and a conversion from Biko Adema gave Kenya victory.
The final stages of the Gold Coast tournament saw Fiji take home the Plate with a comprehensive 36-0 win over Kenya while Canada were triumphant in the Bowl.
Defending IRB Series champions New Zealand served notice of their intentions to defend their title by claiming the Cup via a 40-19 defeat of hosts Australia.
Wales and the rest of the teams now look forward to the second leg of the series in Dubai which takes place from November 29 to November 30. Wales will face Gold Coast runners-up Australia, Scotland and Spain in Pool B when the action moves to the Far East.