Stocks to keep an eye on as gold prices drop

Highlights

• The price of yellow metal dropped to its lowest level since 17 March, trading at £1,586.
• Many experts are now predicting that gold will slide further.

With the strengthening of the US Dollar in anticipation of an interest rate hike by the US Federal Reserve, gold prices witnessed a drastic fall on Tuesday. The price of yellow metal dropped to its lowest level since 17 March as it was trading at £1,586.

The drop is in anticipation that the Fed Reserve will increase the interest rate by 25 basis points when its monetary committee meets next month in June. According to the Bureau of Economic Analysis data, the rate hike is on the back of a rise in US consumer spending. Consumer spending rose 4.4% from April 2022.

Many experts are now predicting that gold will slide further, and with silver’s inverse correlation with the dollar and Fed interest rates relative to gold, the price of metal may remain lull. With the concerns about the existing cost of living and inflation persisting, many investors may turn towards gold as a safe-haven. Investors often explore purchasing shares of gold firms in the hope that it may give better returns compared to physical metal.

Amidst this, let’s explore 3 AIM gold stocks that investors may keep an eye on.

Goldplat plc (LON:GDP)

UK-based Goldplat plc is primarily a mining services firm which engages in global gold recovery operations. The FTSE AIM All-share constituent, Goldplat plc, was witnessing a dip of -1.29% and was trading at 7.65 at the time of writing on 31 May 2023. The GDP stock enjoyed a market cap of XX13.00 with a profit-to-earnings ratio of 4.09. It had given its shareholders a negative return of -6.63% and -24.02% to its shareholders.

Caledonia Mining Corporation Plc (LON:CMCL)

The Caledonia Mining Corporation Plc was witnessing a downtrend as it was down by -1.92% and was trading at GBX 1020 at the time of writing on 31 May 2023. The CMCL on Wednesday was holding a market cap of £199.56 million with a profit-to-earnings ratio of 26.44. The FTSE AIM All-Share listed gold mining company has given its shareholders a negative return of -5.50% and -3.38% annually and on a YTD basis.

Scotgold Resources Ltd (LON:SGZ)

The FTSE AIM All-Share constituent, Scotgold Resources Ltd, held a market cap of £12.08 million with a negative price-to-earnings ratio of -1.23. Scotgold Resources Ltd, on 31 May 2023, was trading at GBX 15.00 and was down by -4.47%. The All-Share stock has given its shareholders returns of -79.26% and -76.04% annually and YTD.