Yes absolutely. In Indexed mode the gradient is the colors linearly through the palette between the foreground and background colors. If that's 5 palette entries that's 5 colors in your gradient, if it's 32 colors then that. In RGB mode a gradient is built algorithmicaly between your foreground and background color and there's a slider to adjust how many steps you want, so if you want two colors you can have that and if you want 32 colors between then you can have that.
Hope that makes sense.