Gold might have been hitting all-time highs in terms of dollars and rands, but it is still at only half the peak set in 1980 after adjusting for inflation, the SA Gold Coin Exchange said on Tuesday.
"Then, prices rose to $850 an ounce, equal to $2 266 today," said its executive chairman Alan Demby.
This phenomenon alone justified a doubling of the gold price from current levels in the next couple of years, he said.
He cited a recent Bloomberg analysis which suggested that speculators were buying gold faster than the world's biggest producers could mine the metal.
"Against this background, analysts had been predicting a rally that might extend the longest run of annual gains since at least 1920," Demby said.
Analysts' predictions for gold included that the yellow metal could go up $5 000 to $10 000 an ounce in the next five to 10 years.
According to Demby, investors should hold a minimum of 15 percent of their assets in gold, with two-thirds of that 15 percent comprising Krugerrands. - Sapa