After bouncing back from their six-year lows, gold miner exchange traded funds could find trouble gaining a foothold on their climb back up as production costs remain mostly above current spot prices.

The Market Vectors Gold Miners ETF (NYSEArca: GDX) has surged 19.3% off its November 5 low. GDX, though, is still down 9.2% year-to-date.

Nick Holland, chief executive officer of Gold Fields Ltd. (NYSE: GFI), argues that the gold miner industry will experience greater writedowns next year as producers’ break-even point remains higher than current bullion prices, reports Kevin Crowley for Bloomberg.

Specifically, Holland points out that the industry average maintains a cost of about $1,300 per ounce, including debt payments.

In comparison, COMEX gold futures are currently hovering around $1,191.5 per ounce. The SPDR Gold Shares (NYSEArca: GLD), the largest physically backed gold ETF, is down 2.1% year-to-date. Gold prices h ave declined as traders try to time the Federal Reserve’s rate outlook while an improving U.S. economy and market diminished demand for safe-haven precious metals. [Gold ETFs Waver Ahead of Uncertain Swiss Vote]

“The industry by and large is under water,” Holland said in the article. “I would expect further writedowns. Production I think will be curtailed but it will take some time to filter through the system.”

During gold rally when prices hit a peak of $1,921.17 per ounce in September 2011, gold miners have been borrowing to fuel a quick expansion and more acquisitions. However, firms are now forced to adjust to the new reality of lower bullion prices.