XAUUSD .
MOST TRADERS WILL LOSE AT $4500 — HERE’S WHY 😈📊
Just because gold reacted from the $4500 low, it doesn’t mean it was ready to continue a bullish move immediately. The $4500 level is a very important key psychological support, and no major rally usually starts by taking direct support from such a level without first creating liquidity.
If you observed carefully, gold previously formed a double bottom near $4500, along with a W pattern structure. On May 6, the market gave a strong upside move after breaking the neckline of that W pattern. That neckline zone, around $4640–$4660, later acted as support during last week.
Because of this, gold avoided continuing the bullish move directly. Instead, it preferred to move downward to trap retail buyers who entered late at higher levels. The recent downside move was mainly to trap aggressive buyers and create liquidity.
Now let’s talk about what could happen next.
On the daily timeframe, a clear trap setup is visible. From the yearly high, gold has been forming a lower high structure. When price reached near $4772, many traders became active sellers, expecting further downside.
At the same time, the low near $4500 did not create a proper lower low, but rather indicated a change of character (ChoCH) near a strong psychological level. This caused many buyers to step in. Now, to fully trap these buyers, the market has pushed price downward while playing a psychological game.
Based on recent price action, especially how gold behaved last Friday, I believe selling may continue in the short term.
Gold took support near $4511 and closed bullish. Because of this, many traders likely entered buy positions with stop losses around $4500 or slightly below.
Since $4500 is such a critical psychological level, the market will likely hunt these stop losses first. Until most of these buyers are forced out and their SLs below $4500 are triggered, a strong reversal is less likely.
Plan for Monday:
According to price action and market psychology, the plan is:
The market may trap buyers who entered from $4500
It may create a scenario where $4500 breaks, pushing traders to believe gold is strongly bearish
This will attract new sellers into the market
That’s where the real move begins.
If the market then reclaims and closes back above
$4500, the picture becomes clear:
Sellers will start getting trapped
Their positions will act as liquidity for the upside
The overall bias will shift fully bullish
In short, the plan is simple:
Wait for buyers to get trapped → watch sentiment flip bearish → then look for bullish continuation once the market reclaims $4500.
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