Overview
On May 6, 2025, Gold (XAU/USD) displayed a clear bullish opportunity for traders who rely on Smart Money Concepts (SMC), Volume Spread Analysis (VSA), and Price Action. By aligning these methodologies, we identified a precise trade setup with strong institutional confluence and a high risk-to-reward ratio.
Smart Money Concepts (SMC) Analysis
The 5-minute XAU/USD chart revealed multiple Breaks of Structure (BOS) and Changes of Character (CHOCH) — strong indicators of institutional movement. These events confirmed a market shift from bearish to bullish, following liquidity grabs below equal lows (EQLs).
Key bullish order blocks (OBs) formed during this transition, particularly in the $3,325–$3,330 zone. Price revisited this OB before launching higher, showcasing a clear footprint of smart money accumulation.
Volume Spread Analysis (VSA)
From a volume standpoint, the chart showed climactic volume paired with wide bullish spreads, indicating professional buying. These were followed by low-volume retracements, suggesting weak selling pressure and paving the way for bullish continuation.
We also noted stopping volume at the order block zone, where high volume with narrow candle spreads suggested that selling was being absorbed—another confirmation of accumulation.
Price Action Confirmation
The final piece of the confluence puzzle came through Price Action. A strong bullish engulfing candle formed off the $3,325 OB, breaking structure and creating an imbalance (FVG). This aggressive move confirmed bullish intent, eventually reaching the $3,387 level before facing rejection.
Trade Setup Details
Entry:
- Buy Limit: $3,330
Targets:
- Take Profit 1 (TP1): $3,360
- Take Profit 2 (TP2): $3,387
Stop Loss:
- Stop Loss (SL): $3,318
Risk-to-Reward:
- Approximate R:R: 1:3+
This setup offered a high-probability trade backed by technical structure, volume confirmation, and institutional behavior.
Bias: Bullish
