“It’s possible mine production could be flat this year globally and could even fall,” Marcus Grubb, managing director of investment research at the producer-funded council, said in an interview in Kalgoorlie, Western Australia. “That would bring the market back into balance again.”

Gold has declined 23 percent this year and is poised to end a 12-year bull run as investors shun the metal as a store of value amid speculation the U.S. central bank may scale back stimulus. Producers from Canada to New Zealand have announced at least $21 billion of writedowns in the past two months and are trimming spending, cutting staff and halting production at their costliest operations.

“I would expect the market to start to recover in the next few months” and prices could reach $1,500 an ounce by the end of the year, Owen Hegarty, vice chairman of G-Resources Group Ltd., the miner backed by Blackrock Inc., said in an interview in Hong Kong. “There’s strong physical demand.”

Gold for immediate delivery fell 0.9 percent to $1,292.05 an ounce as at 2:42 p.m. in Singapore. The metal has rebounded 9.4 percent from a 34-month low of $1,180.50 on June 28.

Barrick Gold Corp., the world’s largest producer, may sell, close or curb output at 12 mines from Peru to Papua New Guinea where costs are higher than $1,000 an ounce. The 12 mines under review account for about 25 percent of Barrick’s output, Chief Executive Officer Jamie Sokalsky said in an interview on Aug. 1.

“The supply side will readjust, because as we know the mining companies now have to adapt to changed circumstances, especially in Australia but in South Africa as well,” the council’s Grubb said.

China is expected to surpass India this year as the world’s largest consumer of bullion, according to World Gold Council predictions, Grubb said. The council represents mining companies that account for more than 60 percent of annual global production, according to its website.