Gold prices have stabilized above the breakout level of $5,100 reached in February, but the precious metal is encountering substantial resistance within the range of $5,200 to $5,300 per ounce. The technical pattern increasingly resembles the conditions observed prior to the sell-off in January. A drop below $5,100 would signal downside risks targeting $4,800 or even $4,380.

According to Forex.com market analyst Razan Hilal, spot gold's ability to hold above the $5,100 breakout level reflects renewed safe-haven demand driven by uncertainties in trade policy.

"Following February's volatility, this movement has returned gold to a clearly bullish technical zone, strengthening investor confidence in the precious metal," she stated. "However, this strength is clashing with historically overbought momentum readings, raising questions about sustainability. The current pattern presents a decisive inflection point, with the potential for continued upward movement existing alongside structural correction risks."

Hilal cautioned that the current gold breakout faces the risk of momentum exhaustion. The technical conditions the precious metal is currently experiencing have historically preceded significant pullbacks.

She noted that price action favors the bullish side, as gold remains above prior resistance levels from February's trading and confirmation of a structural breakthrough is seen with prices above $5,100. However, the Relative Strength Index has returned to the overbought levels seen in January, just before gold experienced a sharp decline from its historical peak. The current momentum pattern is similar to previous price peaks, she added.

Therefore, Hilal argued, unless gold decisively breaks through the resistance near $5,200 and $5,300, it may struggle to sustain gains above $5,000 per ounce. Overextended positioning increases the metal's vulnerability to a sharp correction.

On the downside, a close below the $5,100 support level would outline a clear path for a structural decline.

"If we close below the $5,100 level again, we could anticipate a return to consolidation risks, with the range extending down to the $4,800 mark," Hilal said.

She added that if this level fails, gold could challenge subsequent support levels at $4,600, $4,530, and $4,380, reopening areas that previously acted as demand zones earlier in February.

Consequently, the continuation of gold's rally now depends not only on macro-driven safe-haven flows but also on buyers' ability to defend the breakout zone before momentum exhaustion shifts control back to sellers.