Quick Take: Gold Could Swing $200

Gold could gain or shed as much as $100 from its current price, Grafite Capital's Mihir Dange tells <I>TheStreet's</I> Joe Deaux.
By Bret Kenwell ,

NEW YORK (TheStreet) - On Monday, gold bulls finally got some relief as the yellow metal rallied higher and closed above $1,330 per ounce. Discussing where it might be headed next with TheStreet's Joe Deaux is Mihir Dange, an options trader at Grafite Capital.

After the move higher on Monday, gold is taking a breather on Tuesday with prices fluctuating slightly between negative and positive territory. Dange said that he believes it has mostly been short-covering moving gold, since there have been very little headlines that would influence any major price swings.

His first level to watch was $1,301, a price a lot of shorts had been using as their stop-loss, since $1,300 has been acting as stiff resistance for the metal. After that, he was watching $1,325, which the yellow metal quickly ran to, and then closed above.

With the bullish close over that level, he said he expects it to now act as support. So far it has, with gold

bouncing

off that level nicely.

Dange said that should the precious metal hold his first target of $1,301 as support, and then the next $100 should come on the upside. In this scenario, he's looking for gold to be somewhere between $1,375 and $1,401.

Should the metal break that level and close below $1,225, he said there could another $100 to the downside.

-- Written by Bret Kenwell in Petoskey, Mich.

Follow @BretKenwell

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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