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Gold is an 'extremely crowded trade' and is heading lower, trader says

While gold is on a tear higher right now, that will soon change, the founder of OptionSellers.com predicted Wednesday.

That's because gold is acting as a currency and once the "hysteria slows," it will return to acting like a commodity, James Cordier told CNBC's "Closing Bell."

"Later this year, we think … prices of commodities and inflation are going to be down, and that's when gold is going to return to being a commodity."

Right now gold is an "extremely crowded trade," he said.

He expects it to drop down to $1,200–$1,250 by the end of the year, "after a lot of investors probably see that it's a tighter market."

Investors have been pouring into gold, searching for returns in an uncertain environment. The precious metal is up 28 percent year to date.

George Gero, managing director at RBC Wealth Management, believes it can go higher still, especially now as people realize that even a stable, major currency like the British pound can make new lows.

"Gold has been a wonderful hedge against not just inflation but deflation for 5,000 years," he told "Closing Bell."

"People who have decided to invest in gold are now adding to gold positions, and I think this may continue as we see other currencies begin to show investors why they need the gold."