Gold prices may be striking new records in recent days, but a correction in the market is likely in 2010, warned Bill McQuaker, head of equities & director of multi-manager funds at Henderson Global Investors.
"I think at certain times in the last three years, it has become crowded and we've seen some quite sharp corrections in the price of gold. My suspicion is that we will see another one somewhere in 2010. So, we need to be careful about how we trade gold," McQuaker told CNBC.
Spot gold prices hit a new record high, above $1,160 an ounce on Monday after a rally in the greenback ran out of steam, while resurgent oil prices renewed inflation worries.
"To see that (record rise in gold) tells you unequivocally that inflation is coming back, it is pushing things too far," he said.
"It certainly is suggestive of people in the market being concerned that inflationary pressures are building up and I think when one looks at the economic outlook on a 2-3 year basis, there are considerable risks that there will be an inflation problem somewhere further down the line."