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.
"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.
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Rhodes said there is an absence of "real motivation" for investors to cash in their gold holdings to cover losses from the equity markets.
On Friday, global equity markets slid anew and gold set a second-straight record high as fears of a possible U.S. slide into recession and concerns related to Europe's debt crisis kept investors on edge.
(Reporting by Siddesh Mayenkar, editing by Miral Fahmy)