With the SPDR Gold Shares (NYSEArca: GLD), the world’s largest ETF backed by physical gold, down nearly 24% this year, further significant retrenchment in gold prices may be a hard concept to fathom for some gold bugs.

As it is, with gold prices struggling to stay above $1,300 per ounce and move higher from there, profitability for some miners is threatened. Below $1,300 an ounce, speculation intensifies that even some of the large-cap miners will have a hard time profitably extracting the yellow metal from the earth. [ETF Chart of the Day: Gold Miners]

Imagine a gold prices at $900 an ounce, a roughly 30% decline from current levels, and the adverse impact that could have on gold miners and ETFs such as the Market Vectors Gold Miners ETF (NYSEArca: GDX). Analysis by Cowen & Co. indicates that some of the large-cap gold miners will be able to keep their heads above water “until 2015 in the event of an average gold price of $900,” reports Brendan Conway for Barron’s.

The Cowen analysis takes into consideration what the research deems “net solvency” for miners, a combination of cash on balance sheets, free cash flow, and available credit, extrapolated two years into the future, Barron’s reported.

The analysis highlighted Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM) as two companies that currently have strong net solvency positions. Those are GDX’s second- and third-largest holdings, combining for 20% of the ETF’s weight. Both companies recently cut their dividends in an effort to conserve cash. [Gold Bounce Inches Some Miners Back to Profitability]

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