There is a war taking place in the gold market right now at a very key level. The price of gold held above the 30-week moving average last week (shown below). More importantly, gold hit the 20-week moving average and turned higher. I firmly believe the 20-week (MA) will be a key level to watch if the bull market accelerates.
In the first phase of gold’s bull market, the 70-week moving average was the major support level. Gold stayed above that key moving average until the collapse in the global markets in 2008. After 2008, the 30-week moving average became key support (shown on the left hand side of the above chart). If the gold market is in fact going into an accelerated up-move, the 20-week moving average may be the key support level to watch. Despite the pullback, I believe the latest action in gold is a sign that we are in a new bull market, and the target for 2016 is $3,500 for gold. This would mean a roughly $2,300 advance in gold, which would look like this (see below):