Record gold prices may be heading for a correction of about 8% next month, but the safe-haven metal may also rally to $2,400 an ounce next year as investors seek refuge amid global economic turmoil, a global head at INTL FCStone on Saturday.
"Trees don't grow till heaven. I think buyers need to be beware. we are in a 'caveat emptor' market," said Jeffrey Rhodes, global head of precious metals at the brokerage and an industry expert, told reporters at a conference on gold in Kerala.
International gold struck a record of $1,877 an ounce on Friday, still on track for its biggest one-month rise in nearly 12 years in August and its biggest one-week gain since early 2009.
Rhodes said gold may retrace to $1,725 by next month, and then race ahead.
"My problem is that people are buying gold and they don't understand why they are buying gold and that's a big problem and that is a classic symptom of a bubble," said Rhodes.
Rhodes said there is an absence of "real motivation" for investors to cash in their gold holdings to cover losses from the equity markets.
{{/usCountry}}Rhodes said there is an absence of "real motivation" for investors to cash in their gold holdings to cover losses from the equity markets.
{{/usCountry}}On Friday, global equity markets slid anew and gold set a second-straight record high as fears of a possible US slide into recession and concerns related to Europe's debt crisis kept investors on edge.