• Gold stages a rebound in short-term timeframe
• Upturn is not convincing; bulls need to overcome $2,650

Gold has been showing some signs of life over the past couple of hours but don’t get too excited just yet. Despite the upturn in the price, this is not convincing enough to say the bulls are back in charge.

The precious metal dipped below an upward-sloping channel on the four-hour chart, and while it’s trying to recover, there's a chance this is just part of a bearish flag pattern—meaning a continuation lower is still a real possibility.

The 20- and 50-period simple moving average (SMA), which have been somewhat restrictive lately, are again under examination, with the 38.2% Fibonacci retracement of the previous upleg being in sight as well at $2,650. If the price fails to jump above this border, it could flip back to the 50% Fibonacci of $2,630 and then toward the 61.8% Fibonacci of $2,607. Additional declines from there could cause a sharper decline to the 78.6% Fibonacci of $2,575.

On the flip side, the RSI is trying to climb back above the neutral 50 mark, and the stochastic oscillator is showing signs of a potential positive shift. These could point to some bullish momentum lingering in the market. If gold can break above the $2,650 threshold, it could make its way to the 200-period SMA and the 23.6% Fibonacci of $2,677. From there, it could even target the $2,710-$2,720 resistance zone.

In brief, while gold has made a bit of a recovery, it’s not out of the woods yet. Buyers will need to see a clear and sustained move above $2,650 before getting fully convinced that the upside is back on track. Until then, the downside risks are still very much in play.