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XAUUSD H1 – Trading Liquidity during the Year-End Period
Gold is still in a bullish structure, but this is a holiday market and liquidity is thin as many banks are closed. The better approach here is to trade around areas of liquidity and value rather than chasing price on long-term moves.
Technical overview
In the first half of the year, prices continued to follow an upward channel, going through phases of expansion and correction.
After the recent strong push, the market is now consolidating and reversing, generally favoring level-based execution.
Momentum remains generally positive but is not accelerating significantly, suggesting a higher likelihood of selective buying and liquidity coming into play amid weakness.
Priority Scenario – Master Plan
Buy pullbacks in key liquidity areas within ascending channels
Liquidity buying zone: 4475 – 4478
POC buying area: 4409 – 4412
Technical basis:
The 4475-4478 area is the near-term liquidity area within the channel, where buyers often step in during technical pullbacks.
The 4409-4412 area is consistent with the POC volume distribution, which is a value area where price often stabilizes and rebalances supply and demand.
Expected price action:
Corrective action into these liquidity areas, followed by a bullish reaction, can set up the next higher phase within the channel structure.
Alternatives – Secondary Plan
Only sell short at the upper limit as a quick move
Sales area: 4565 – 4469
context:
This area is close to the upper border of the channel and profit-taking is common, especially when liquidity is thin. Any selling idea should be viewed as a quick, short-term trade, not a trend reversal.
Why liquidity-based trading matters here
Holiday periods can produce erratic inflows, sharp spikes and stops
Volume Profiles Help Identify Higher Probability Execution Areas Rather Than Emotional Inputs
Trading around value and liquidity can improve consistency when price action becomes less reliable
Fundamental Background and Market Sentiment
OANDA traders highlighted several drivers behind the precious metals’ strength, with long-term forecasts pointing to further gains for gold and silver next year. The argument remains underpinned by safe-haven demand, expectations of looser monetary conditions and a weaker dollar.
However, in the short term, the holiday environment may distort price action, making liquidity areas even more important for execution.
