It is time for investors to take profits off the table following gold's record run, said John Licata, chief commodity strategist at Blue Phoenix on CNBC Tuesday.
"I just think that we've gone up a little bit too fast over the last couple of months," Licata said, acknowledging that he still favors gold in the longer term period. "As we start to enter the holiday season, it could be prudent to start to take some money off the table . "
Gold prices have experienced a lot of volatility with huge swings seen within one session, Licata said, warning that the precious metal could face a selloff of $200/oz, which would be a signal to buy.
Spot gold rose to a fresh record highon Tuesday, up for the fourth straight session to $1,414/oz, as inflation worries and euro zone sovereign debt woescontinued to lure investors to the precious metal.
"We're not really seeing that inflation just yet, even though, I think that commodity prices can bring that — with the unemployment rate around 9.6 percent, and me thinking that the comments out of Bernanke last week and the Fed were more about psyche than actuality — I think we are not going to see a lot of that $600 billionbe put in," he explained.
Licata said he would take money out of the gold, silver , copper and palladium plays and instead, invest that into uranium as a longer-term approach.
He recommended Strathmore Minerals as he believes the stock is undervalued compared to its peers. Strathmore is a client of Blue Phoenix.