Last year gold prices tumbled 28 per cent - the worst fall in thirty years - and the slump in the price of the yellow metal is hitting this year’s output.
Production costs are flooring and, in response, miners around the world have slashed costs, delayed new work and hedged. Today, two Russian gold miners - Petropavlovsk and Nord Gold - have said they're planning to cut production in 2014.
Russia, one of the Big Four emerging markets, has growth rates at half the pre-crisis level, and its diminishing gold production is unlikely to move things on very quickly.
Its largest gold miner, Polyus Gold, has put back starting a key project by a year, and rival Polymetal is planning to keep production flat this year.
Speaking at the World Economic Forum this week, Jeff Joerres, chief executive of Manpower Group, stressed the shift in investment mood:
It was a gold rush. Now the gold rush is over.
In the past, regardless of industry and regardless of product, you just ran to those emerging markets because there was an arbitrage opportunity. Now there's a much more sanguine decision-making process.
Petropavlovsk chairman, Peter Hambro, told Reuters: "The miners were mining at the highest possible cost because the gold price was going up and when it stopped going up, they had to reduce that. So that means that they will mine less gold."
The company expects its gold production to fall by 16 per cent year-on-year in 2014 to 625,000 troy ounces after it sold high-cost alluvial assets.
Nord Gold is targeting production in the range of 870,000 to 920,000 ounces of gold equivalent, compared to 924,400 ounces in 2013.
But analysts don’t expect the price of the precious metal to go much lower than its current levels of around $1,250 per ounce, with a number expecting that gold will bounce back as early as this year.
At the beginning of January, Capital Economics reiterated its view that the price of gold will revisit $1,400 at least this year, probably going higher.
Nevertheless, the impact of crumbling demand will still be felt keenly by firms.
In a report out yesterday, Deloitte described the changes affecting the mining industry as a whole as "seismic". And its warning that the supply-demand imbalances will mean a tough ride for miners seems particularly pertinent for those in gold:
For decades, the industry has typically waited out market swings, with the assurance that commodity prices would eventually rebound. They will again this time, too. Some industry analysts even anticipate more robust recovery by the second half of 2014. But which companies, and which management teams, will be knocked out of the ring before we get there?