Reading Gold Through Auction Market TheoryGoldOANDA:XAUUSDMr_JudeXAUUSD Weekly Auction Market Analysis (July 13–17) | Preparing for Monday's Open This analysis is based on the integration of Volume Profile (Daily VAH, VAL & POC), Initial Balance (IB), London and New York Opening Ranges, Daily VWAP, and Volume Delta. Rather than predicting the market, my objective is to understand where institutions accepted value, where liquidity was sought, and where buyers or sellers gained control. The market leaves footprints, and this framework helps me read those footprints. Weekly Market Structure At first glance, the overall market structure remains bearish. Throughout most of the week, Gold continued to print lower highs and lower lows while value consistently migrated downward. Wednesday and Thursday clearly demonstrated initiative selling, with sellers maintaining control below VWAP and continuously pushing value lower. The slope of the Daily VWAPs from Wednesday through Friday also confirms that institutional order flow favored the downside during the majority of the week. However, despite the bearish structure, Friday's session introduced an important change in the auction. Instead of another continuation lower, the market began showing signs that sellers were losing control. Monday Monday's auction was characterized by aggressive selling after the London Open. Price respected the London Opening Range before sellers expanded the downside. The Volume Profile developed a clear lower distribution, confirming initiative selling rather than rotational trade. The Initial Balance failed to hold as price expanded lower, establishing the bearish tone that carried into the remainder of the week. Tuesday Tuesday transitioned into a more balanced auction. Instead of continuing Monday's momentum, the market spent much of the session rotating around value. Buyers and sellers appeared relatively balanced, with acceptance occurring near the Point of Control. Although the market attempted to recover, buyers failed to reclaim higher value, allowing the broader bearish structure to remain intact. Wednesday Wednesday marked another important shift back toward seller dominance. The market initially attempted to rally but was rejected near higher value. Once sellers regained control, price remained below VWAP for most of the session, and value once again migrated lower. The Volume Profile displayed another bearish distribution, confirming continued acceptance of lower prices. Thursday Thursday produced the strongest bearish auction of the week. The Initial Balance established a lower range early in the session before sellers aggressively expanded downside. Price accepted below previous value, creating another clear lower distribution and pushing the Point of Control lower. This was classic initiative selling, with little evidence of responsive buying until late in the session. At this stage, sellers remained fully in control. Friday – The Most Important Session Friday completely changed the character of the weekly auction. Early in the session, price swept Thursday's Previous Day Low (PDL). Under normal bearish conditions, one would expect continuation after taking out previous lows. Instead, something different happened. After the liquidity sweep below Thursday's low, sellers failed to achieve further downside acceptance. Rather than accelerating lower, the market quickly found responsive buyers. This is often one of the earliest signs that institutional participants are absorbing aggressive selling. The failure to continue lower after taking liquidity is an important auction signal. It suggests that the purpose of the move was to access liquidity rather than establish new value. Volume Profile Observation Friday's Volume Profile differs noticeably from the previous sessions. Rather than building another lower distribution, price returned back inside value and spent the remainder of the session accepting higher prices. Current price is now trading near Friday's Value Area High (VAH) and Point of Control (POC), suggesting that the market is beginning to establish fair value after Thursday's aggressive markdown. Acceptance inside value is often the first indication that the market is transitioning from a trending auction into a balancing auction. VWAP Analysis VWAP continues to be one of the strongest institutional references. Friday initially opened below VWAP, maintaining the bearish tone established earlier in the week. However, buyers eventually reclaimed VWAP and managed to hold above it into the close. This is significant because institutions often execute around VWAP. When price transitions from trading below VWAP to holding above it, it frequently indicates that buyers have begun regaining short-term control. While this does not yet confirm a bullish trend reversal, it does suggest that selling pressure is weakening. Initial Balance Analysis Friday's Initial Balance also provides valuable information. The IB Low was tested several times but never convincingly broken after the early liquidity sweep. Instead, buyers consistently defended the lower portion of the range before rotating price toward the upper half of the Initial Balance. This behavior reflects responsive buying rather than initiative selling. As long as price remains above Friday's IB Low, buyers retain the short-term advantage heading into Monday. London and New York Opening Range Both major sessions attempted downside expansion. During the London Open, sellers pushed lower but failed to generate sustained continuation. The New York Open produced another attempt to drive price downward. Once again, the market rejected lower prices. The inability of both major sessions to maintain bearish momentum suggests that significant sell-side liquidity had already been exhausted. Repeated failures to continue lower often precede rotational or reversal auctions. Volume Delta Volume Delta provides perhaps the strongest evidence supporting Friday's auction. Throughout the selloff, aggressive market sellers continued hitting the bid. Normally, this should have resulted in additional downside. Instead, price stabilized and reversed higher. This divergence between negative Delta and rising price strongly suggests absorption. Large passive buyers were willing to absorb every aggressive sell order entering the market. Absorption near Previous Day Lows frequently marks institutional accumulation rather than distribution. Although Delta alone should never be used as a trading signal, when combined with Volume Profile and VWAP, it strengthens the case that Friday's selling was largely absorbed. Fundamental Considerations While technical structure provides the framework, macroeconomic conditions remain equally important for Gold. Several factors may influence next week's direction: Ongoing geopolitical tensions continue to support safe-haven demand for Gold. Central banks remain consistent long-term buyers of Gold, providing structural support. However, stronger U.S. Treasury yields and a firm U.S. Dollar continue to create headwinds for precious metals. Market participants remain focused on upcoming U.S. inflation data, employment figures, and any Federal Reserve commentary that could alter interest rate expectations. These competing forces suggest that Gold may remain highly reactive to incoming economic data, making institutional price behavior around key auction levels even more important. Monday Trading Plan My bias for Monday is moderately bullish, but confirmation is essential. I am not looking to buy simply because Friday closed higher. Instead, I want the auction to confirm that buyers are truly accepting higher prices. Bullish Confirmation The bullish scenario strengthens if price: Holds above Friday's VWAP. Continues accepting above Friday's Point of Control. Maintains value above Friday's Value Area Low. Breaks and accepts above Friday's Value Area High. Produces positive Volume Delta during London or New York. If these conditions develop, I will expect a rotation toward the psychological 4000 level, followed by a test of higher weekly value around 4005–4015. Bearish Invalidation The bullish thesis becomes invalid if: Price loses Friday's VWAP. Friday's Value Area Low fails. Friday's Initial Balance Low breaks with acceptance. Volume Delta becomes increasingly negative while price also accepts lower value. If that occurs, Friday's rally was likely nothing more than short covering, opening the possibility of another test of Thursday's Previous Day Low and potentially new weekly lows. Final Outlook Although the broader weekly structure remains bearish, Friday's auction introduced the first meaningful evidence that sellers may be exhausting themselves. The sweep of Thursday's low, reclaim of VWAP, acceptance back into value, defense of the Initial Balance, and signs of absorption on Volume Delta collectively suggest that the market may be preparing for a short-term corrective rally rather than immediate continuation lower. My current outlook for Monday is: 🟢 60% Bullish | 🔴 40% Bearish The market has not yet confirmed a reversal, but it has provided enough evidence to justify watching for higher value acceptance rather than automatically expecting continued selling. As always, I don't predict the market—I react to the auction. Price, volume, value, and order flow will determine whether buyers truly have control when London and New York reopen.