Gold prices still have room to reach the highs seen in 1980, it has been claimed.

If prices are adjusted for inflation, the equivalent of the $850 an ounce level reached 28 years ago is about $2,500 an ounce today, analyst Greg Cavan explained to ABC News.

And with low US interest rates and the weakening dollar, this is a high that could be achieved within the next two years, he predicted.

Slowing gold production could also be another factor for those buying gold to consider - GFMS has said that gold mining output fell by one per cent last year.

A number of major mining firms have also recently reported drops in overall gold production for the last financial year.

"We're really nowhere near the real highs - the real historic highs of the price of gold - so there's a lot of potential to reach those old highs and break through them," Mr Cavan stated.

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