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A lot of observers are wondering when the bottom will come for the gold market.

And evidence globally is starting to suggest it could be soon.

One of the main reasons being struggling production. With many of the world’s most important production centers now being pinched by lower metals prices.

News this month shows that one of the most critical trends on this front is still in motion. That being a big decline in gold production from the world’s fifth-largest producer, Peru.

The country’s mining ministry released production statistics for the month of June. Showing that output fell by over 20% as compared to June 2013.

That’s a big drop–equating to nearly 90,000 ounces of lost output for the month alone.

Looking on a year-to-date basis, the loss is even greater. With Peru’s production for the first half of 2014 down 16% from the year-ago period–a loss of over 405,000 ounces for the six-month period.

This is a meaningful amount of supply lost from the market. So the question is–what’s happening here?

Some of the decrease has come from government efforts to stop mining in the sensitive Madre de Dios region. But the overall impact of production losses here has been relatively small.

Breaking down the numbers, the bulk of the production fall has come from a few big mines. Namely, the Yanacocha, Santa Rosa and Pierina operations–which together have seen a decline of over 310,000 ounces of output during the first half of 2014.

The operators of those facilities–which include Barrick Gold at Pierina and Newmont Mining at Yanacocha–have been fairly quiet on the reasons for the fall. Newmont has mentioned falling ore grades from its production centres here.

It’s possible that these mines are simply running long in the tooth–and thus seeing natural declines. But it’s interesting to note that the decreased production is coming at a time of lower gold prices. Suggesting that perhaps economics are playing a role in curbing output.

If so, it would be one more sign that low prices are curing low prices.

Here’s to the numbers behind the story,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook