After a period of decline, gold has begun to regain momentum over the past two weeks, rising from levels near $4,000 to trade around $4,390 per ounce.
The latest move has raised an important question for markets: Has the downward correction come to an end, paving the way for gold to resume its broader uptrend, or is the recent advance merely a temporary rebound?
To answer this question, the technical picture becomes clearer when looking at both the weekly and daily time frames.
Gold Breaks Above the Downtrend Line
On the weekly time frame, gold had been moving through a corrective downtrend, with a descending trendline putting pressure on prices and pushing the metal toward lower levels.
However, over the past few weeks, gold has managed to break above the descending trendline, providing an initial signal that selling pressure is easing and buyers are returning to the market.
Gold has also moved back above the weekly pivot point at $4,244, further supporting the potential for continued recovery.
Despite these positive signals, however, a break above the trendline alone is not enough to confirm that the correction has definitively ended, as gold still faces several key resistance levels.
$4,469 – The First Key Test
The level of $4,469 represents the first major resistance facing gold, a break above this level, followed by a sustained move higher, would provide additional support for the bullish scenario, signaling that buyers are gaining further control after the break above the descending trendline.
The more important test, however, comes at $4,597, a key resistance level on the weekly chart.
If gold manages to break above $4,597 then hold above it, the probability will increase that the current advance is more than a temporary rebound and instead marks the beginning of a resumption of the broader uptrend.
As a result, the $4,469-$4,597 zone is likely to be the key area determining gold’s next major move.
What Does the Relative Strength Index Say?
Momentum indicators also point to an improvement in gold’s recent performance.
The Relative Strength Index (RSI) on the weekly time frame has risen to around 51.50, after falling to lower levels during the correction.
A move back above the 50 level reflects improving momentum in favor of buyers. At the same time, the indicator remains well below overbought territory, suggesting that gold still has room to advance without showing clear signs of excessive buying.
The RSI therefore remains consistent with the recent improvement in price action, although it should be viewed as a supporting signal rather than standalone confirmation of a trend reversal.
The 200-Day Moving Average Puts Gold to a Key Test
On the daily time frame, another important factor could determine whether the recent advance can develop into a sustained upward move.
The 200-day simple moving average (SMA) is currently around $4,501, while gold is trading near $4,390.
This means gold has yet to reclaim its 200-day moving average, leaving the metal facing an important technical test.
Notably, the 200-day moving average sits close to the first major resistance level at $4,469, making the $4,469-$4,501 area particularly important.
If gold breaks above this zone and then continues higher through $4,597, the technical outlook will become significantly more constructive, providing stronger confirmation that the correction may have ended.
Conversely, failure to reclaim the 200-day moving average could indicate that sellers remain capable of defending key resistance levels.
What About the Bearish Scenario?
Despite the recent improvement, a renewed wave of selling pressure cannot yet be ruled out.
Failure to break above $4,469 then $4,501, or a rejection from this area, could trigger another decline in gold prices.
In that scenario, $4,244 would be the first key support level to watch.
A break below this level could weaken the bullish outlook and expose gold to a move toward $4,117, while $3,891 represents a deeper support level whose breach would carry more significant bearish implications.
For this reason, gold’s ability to remain above $4,244 will remain an important factor in maintaining the current positive momentum.
Has the Correction Actually Ended?
For now, the technical picture suggests that the correction may be approaching its end, but final confirmation has yet to emerge.
On the one hand, gold has broken above the descending trendline, moved back above the weekly Pivot Point, and seen its RSI improve.
On the other hand, gold remains below the 200-day moving average at $4,501 and has yet to break above the key resistance zone between $4,469 then $4,597.
This highlights the importance of combining the two charts: the weekly time frame is showing early signs of an improvement in the broader trend, while the daily time frame indicates that gold still faces an important test before that improvement can be confirmed.
Conclusion
Gold has begun to show clear signs of improvement following its recent decline, but the market has yet to deliver decisive confirmation that the correction is over.
The $4,501 level, representing the 200-day moving average, along with the broader $4,469-$4,597 resistance zone, remain the key levels to watch.
A break above this area, followed by a sustained move above $4,597, would significantly strengthen the case for the end of the correction and a resumption of the broader uptrend.
Conversely, failure to overcome these resistance levels and a move back below $4,244 would leave the door open for the correction to continue.
Ultimately, the key question for gold is no longer simply “Has it risen?” but rather “Can the recent advance develop into a new uptrend?” The answer will likely become clearer as prices approach the key resistance levels ahead.