Although many believe that gold prices will bounce back soon, it seems like the pressure the greenback is exerting on the shiny yellow metal will prove otherwise. Despite the current buying spree gold bugs are on, the impending rate hikes by the Feds are keeping the prices of gold status quo and as a matter of fact has been actually pressuring the prices of gold downwards, which is not actually bad news for those who purchased gold at above 1,300 USD per ounce as currently they have the opportunity to bring the average prices of their gold down substantially.

Early on in the year analysts were optimistic that gold prices would break its shackles and start surging over its stagnant position however, they did not account for the inhibitors that were already in place which included fed rate hikes, stronger dollar, low oil prices and a slower economic machine which were already undermining commodity prices only allowing small and controllable moves and their expectations to see gold over the $1,300 an ounce mark fell short and based on the fact that the more recent slump of gold going under the 1,200 USD mark attests to that fact.

Nevertheless, selling should be the furthest agenda on any investors mind in the current situation as one thing that is certainly happening to gold and other precious metals is that the market is definitely oiling tighter and tighter and it is approaching breaking point and when this happens, there is no way to stop the prices of precious metals surging by at least 50 % from where they are currently before meeting any market resistance at all. The current market resistance at slightly below the 1,300 mark is stemming from the gold bugs themselves who are trying to reduce their averages.
On the other hand, gold related mining stocks are totally a different matter as the mining industry is currently being pressured due to the lower prices of gold and therefore many are actually under-valued, especially small cap mining stocks that have substantial reserves and positive balance sheets, these stocks are have enormous potential to bring about positive numbers to an investor’s portfolio. For instance most analysts are expecting a few small cap mining stocks to soar this year, these few include Pershing Gold Corp, Go-Gold Resources, Pilot Gold, Lydian International and B2 Gold.

These companies are severely undervalued due to market sentiments, but a glance at their financial standings reveal that these companies have sufficient current assets to meet their short term obligations and would be able to ride the current downturn right up to the point when market conditions improve at which point these stocks will soar by more than a 100 % quite easily. Pilot Gold for example has a current market price of 0.48 / share with the year high at $0.83 and year low at $0.22.

The company has a market capitalisation of slightly over 60 million dollars with a total of 125 million outstanding shares. What most do not realise is the fact that the company recently closed a Canadian contract worth C$ 4.47 million and has C$ 14 million in liquid holdings.