Market Context
On the 5-minute timeframe, Gold has displayed significant structural shifts reflective of institutional activity. Through the lens of Smart Money Concepts, Volume Spread Analysis, and traditional price action, we can clearly see a transition from bullish to bearish intent as liquidity zones are created and swept.
Smart Money Concepts (SMC)
The market began in a bullish structure, evidenced by multiple Breaks of Structure (BOS) and a strong rally that started around 16:00 and continued into the late session. This impulsive move was characterized by clear higher highs and higher lows, with liquidity engineered and swept along the way.
However, a Change of Character (CHoCH) occurred near the 3,350 zone, signaling the start of a bearish narrative. This was later confirmed with multiple bearish BOS, indicating that sellers had taken control of the order flow.
Notable zones include:
- Supply Zone: 3,335 – 3,355, which caused sharp rejections and served as the origin of the bearish BOS.
- Demand Zone: 3,285 – 3,295, representing the last area of unmitigated demand before the bullish rally.
The presence of a “Weak High” at ~3,355 suggests a potential liquidity target for future upward retracements, while the “Strong Low” at ~3,270 implies a key defensive zone for buyers.
Volume Spread Analysis (VSA)
Volume action aligns with institutional behavior:
- High Volume Bar at 20:00: Suggests a possible buying climax or accumulation phase. This was followed by a strong upward breakout — a classic signal of smart money engagement.
- Volume Decrease on Decline: As the market began pulling back, a notable drop in volume was observed, hinting at a lack of aggressive selling pressure and a potential for retracement or re-accumulation.
- High Volume, Narrow Spread Candles at Supply: Indicate distribution or professional selling, particularly in the upper zones around 3,350, where price failed to sustain gains.
This dynamic between volume and price spread gives a strong signal that institutional traders may have been offloading positions in the premium zone, anticipating a decline.
Price Action (PA) Insights
The raw structure tells a consistent story:
- Double Top Formation near the 3,355 zone hinted at buyer exhaustion.
- Aggressive Selling Wicks at key supply zones reinforced bearish intent.
- Lower Highs and Lower Lows post-03:00 confirm the shift in trend.
- Consolidation then Breakdown from 3,335 formed a mini-distribution phase, with a clean BOS that took out prior demand.
Price is now hovering around 3,314, caught between the defined supply and demand zones. This is a no-trade zone for smart traders unless clearer confirmation emerges from either side.
Conclusion and Trade Ideas
Gold has transitioned from a bullish impulse to a controlled bearish correction. While short-term pullbacks may occur, the market is showing signs of redistributing positions after sweeping liquidity to the upside.
Scenarios:
- Short Opportunity: Look for bearish confirmation near the 3,335–3,345 supply zone on low-spread, high-volume rejection candles.
- Long Setup: A return to the 3,285–3,295 demand zone, followed by a bullish engulfing or VSA confirmation, may offer a reactive long.
Until a new BOS or CHoCH occurs, traders should remain patient and reactive rather than predictive.
