Smart Money, VSA, and Price Action-Based Trade Setups
Gold (XAU/USD) continues to present dynamic opportunities for traders amid structural shifts and volume clues. As of May 26, 2025, price action on the lower timeframes (5-minute and 15-minute) shows both bullish and bearish possibilities depending on key levels and reactions. This analysis explores the current structure using Smart Money Concepts (SMC), Volume Spread Analysis (VSA), and classic Price Action, outlining clear long and short trade opportunities.
Long Setup: Price Holding Demand and Showing Accumulation Signs
From an SMC perspective, the 15-minute chart shows a clear Break of Structure (BOS) to the upside from the 3,280 level, with price making a significant run-up to 3,360+. However, recent movement reflects a retracement, marked by a Change of Character (ChoCH), followed by a test of a well-defined demand zone around 3,340–3,344 on the 5-minute chart. Importantly, price has respected this zone, forming higher lows and beginning to consolidate slightly above it.
Volume analysis supports the bullish case. There were high volume spikes near the recent lows, suggesting stopping volume and possible accumulation by smart money. The retracement has occurred on lower volume, indicating a lack of aggressive sellers. This is a key VSA clue that buyers may soon take control again.
Price action is showing subtle bullish signs. Although no full bullish engulfing candle has formed yet, the tight consolidation and rejection wicks above the 3,340 level indicate accumulation behavior. If price breaks above the local resistance between 3,352–3,354, particularly with strong volume and a clean candle close, it could signal a bullish continuation.
For long positions, traders can look to enter after a confirmed breakout above 3,352, ideally on a retest of the breakout level. A more aggressive entry could be placed directly within the 3,340–3,344 demand zone, but this carries a higher risk. In either case, the stop-loss should be placed below 3,335, just beneath the demand base. Initial targets would be the previous highs at 3,360, with further extension possible to 3,365–3,370, where a major supply zone and prior liquidity rests.
Short Setup: Liquidity Sweep and Weakness from Supply
Despite bullish possibilities, the market also offers a viable bearish trade setup, especially considering the recent liquidity grab near 3,365, where equal highs (EQH) were swept and followed by a downside BOS. This behavior often indicates distribution—smart money trapping breakout buyers and offloading positions into strength.
On both the 5M and 15M charts, price has now pulled back into a lower high area, just below the previously formed supply zone around 3,360–3,365. The market structure has shifted to a slight downtrend, and price is forming lower highs. Notably, VSA reveals climactic volume at the highs and no demand bars during the recent uptick, which hints that buyers are no longer participating actively.
Price action confirms this bearish sentiment: candles in the 3,350–3,352 region are failing to show bullish continuation. Should price make a false breakout above 3,352–3,355 and then sharply reverse with a bearish engulfing or rejection candle, this would be a strong short signal. Additionally, if price retests the 3,360–3,365 supply zone and fails to break through with strength, it may offer another excellent entry for a short position.
For shorts, entries between 3,352–3,362 offer favorable risk-to-reward potential. The stop-loss should be placed above 3,367–3,370, protecting against a structural invalidation. The first target is 3,340, aligning with a recent demand test. Further targets include 3,330 and 3,320, which are clean inefficiency zones and potential next demand levels.
Trade Management Summary
| Trade Type | Entry Area | SL | TP Targets |
|---|---|---|---|
| Long | 3,340–3,352 | Below 3,335 | 3,360 → 3,365 → 3,370 |
| Short | 3,352–3,362 | Above 3,370 | 3,340 → 3,330 → 3,320 |
Final Thoughts
Gold is currently trading at a pivot point where both long and short opportunities exist. The next key movement will likely be decided by the market’s reaction at the 3,352–3,355 level. Traders should remain adaptive and patient—watching for volume confirmation and structural follow-through before committing to a bias. With precise entries and disciplined stops, both directions offer solid trading opportunities.
