Miner exchange traded funds have been one of the worst performers year-to-date, but with gold prices still hovering above production costs, gold miners could still turn around.

According to Macquarie Group, gold prices are trading above miners’ marginal costs, reports Nicholas Larkin for Bloomberg. Gold futures are hovering at about $1,283 per ounce, or trading around 40% above the marginal cost of production. [ETF Securities: Gold Miners De-rating Done or More to Come?]

The CRU Group, a research company in London, calculates that only about 2.5% of global output losses money if gold prices fall below $1,300 per ounce.

“Despite its rapid decline, gold is another commodity where prices are not putting any pressure on costs,” Macquarie Group analysts Colin Hamilton and Duncan Hobbs wrote in the report.

Gold is moving toward its first annual decline in 13 years. Gold bullion has declined 23% over the first two quarters of the year as investors shifted over to riskier equities in the bull market rally. The SPDR Gold Shares (NYSEArca: GLD) fell 23.9% year-to-date.

The Market Vectors Gold Miners ETF (NYSEArca: GDX), which follows large gold mining companies, has declined 46.4% year-to-date while the Market Vectors Junior Gold Miners (NYSEArca: GDXJ), which tracks smaller miners, decreased 51.9%.

Showing Page 1 of 2