Fair Value Gap on Gold: Gap, Fill, $118 Drop
The fair value gap explained step by step on a real example: three candles leave a $15 gap, price comes back to fill it two hours later, and the original move resumes. Then how traders use it: entry inside the gap, stop above it, first target at the last low.
Key points
Gap (22 Oct 2026, 1H, UTC): 02:00 candle low $4,124.7, 03:00 candle fell from $4,132.6 to $4,107.3, 04:00 candle high $4,109.3, leaving a $15.4 gap.
Fill: the 06:00 candle rallied to $4,118.7, about 60% into the gap, after a low of $4,082.4 at 05:00.
Continuation: the $4,082.4 low broke at 11:00 and gold reached $4,000.9 at 02:00 UTC on 23 Oct, $118 below the fill.
Typical use: entry inside the gap, stop just above the gap’s top, first target at the last swing low.
Not every gap holds. The stop above the gap defines the risk when it fails.
Chart data: COMEX gold futures (GC) 1-hour OHLC, 21-23 Oct 2026, UTC. Education only, not a signal.
Read more: Fair Value Gaps (FVG) on XAUUSD: A Practical Guide · Smart Money Concepts (SMC) for XAUUSD: A Balanced Guide
Transcript
This $15 gap on gold's chart called a $118 drop. Here's how it works.
A fair value gap is three candles. The middle one moves so fast that candle one and candle three never overlap. Price skipped that zone, so it often comes back to fill it, then continues.
Thursday, October twenty-second. Gold drops $25 in one hour. Candle one's low: $4,125. Candle three's high: $4,109. That's the gap.
Two hours later, price rallies back into the gap. Filled.
Then sellers take over. The low breaks, and gold falls all the way to $4,001. $118 from the fill.
How traders use it: sell inside the gap, stop just above it, target the last low first.
Gap, fill, continuation. Save this.
