A Confluence of Smart Money Concepts, Volume Spread Analysis, and Price Action
Gold (XAUUSD) continues to present compelling intraday opportunities as institutional footprints become increasingly visible on lower timeframes. In this analysis, we’ll dive into the 5-minute chart of XAUUSD using Smart Money Concepts (SMC), Volume Spread Analysis (VSA), and Price Action to uncover potential high-probability trade setups.
Smart Money Concepts (SMC) Analysis
SMC provides a framework for understanding market structure through the lens of institutional behavior—especially around liquidity and order blocks.
Change of Character (ChOCH) & Break of Structure (BOS)
The chart clearly marks a pivotal bullish Change of Character (ChOCH) after an extended period of bearish momentum. This was followed by multiple bullish Breaks of Structure (BOS), confirming a shift in direction and the initiation of a new bullish leg.
Liquidity & Supply Zones
Equal Highs (EQH) were swept just above the 3,410–3,415 level, forming a Weak High—a classical liquidity grab, often preceding a reversal.
Several Demand Zones (highlighted in blue) formed as price created higher highs and higher lows. Notably:
3,380 Zone (recently mitigated),
3,370 Zone (still unmitigated),
3,360 Zone marked as a Strong Low, suggesting potential institutional accumulation.
Volume Spread Analysis (VSA)
VSA reveals the true intention of market participants by analyzing the relationship between volume and price spread.
Buying Climax & Volume Divergence
At the 3,415 level, we observe climactic volume followed by an aggressive bearish candle—a textbook buying climax. As price reached new highs, volume failed to rise correspondingly, indicating exhaustion in buying pressure.
Accumulation at Demand
Significant volume spikes are visible at the demand zones, suggesting professional buying activity and validating these zones as potential springboards for long positions.
Price Action Analysis
Price action confirms the narrative told by SMC and VSA through candlestick behavior and structure shifts.
Rejection Candles & Support Zones
The rejection candle at 3,415 signifies a potential local top following the liquidity grab. Former resistance at 3,390 now acts as a support zone, with wicks showing rejection—an important sign of underlying bullish intent.
Trend Structure
The broader trend remains bullish with an intact sequence of higher highs and higher lows. However, a correction appears underway, offering opportunities for both counter-trend and trend-continuation trades.
Trade Ideas & Setup
Setup 1: Intraday Short from Supply (Liquidity Reversal)
Setup 2: Long from Unmitigated Demand (Trend Continuation)
Entry Zone: 3,370–3,375 (lower end of demand zone preferred)
Stop Loss: Below 3,360
Target 1: 3,390
Target 2: 3,410
Confluence: Bullish BOS, unmitigated demand, accumulation volume, strong low support
Conclusion
This 5-minute XAUUSD chart offers a great case study in how the fusion of SMC, VSA, and Price Action can reveal institutional intent and provide a roadmap for precision trading. Whether you are trading liquidity grabs or demand zone retests, patience and confirmation remain key.
Pro Tip: Wait for confirmation candles or lower-timeframe BOS before entering trades, especially near supply/demand zones.
⚠️ Risk Disclaimer
The content provided in this analysis is for educational and informational purposes only. It does not constitute investment advice, financial advice, or a recommendation to buy or sell any financial instrument. Trading involves risk, and you should only trade with capital you can afford to lose. Past performance is not indicative of future results. Always conduct your own research and consult with a licensed financial advisor before making any trading decisions.
