Gold companies that spent $195 billion on acquisitions in a decade-long price boom are at risk of taking writedowns like Newcrest's. Producers of the metal face more stresses with brokers from Goldman Sachs Group Inc. to Citigroup Inc. cutting price forecasts as bullion heads for its first annual drop since 2000.

“We would expect that there would be several, if not many companies, who would also in the next reporting period be coming to a list of impairments,” Michael Elliott, sector leader for Ernst & Young LLP's global mining practice, said in a phone interview from Sydney. “It's just a question of timing, and who had the largest exposures.”

Eoin Treacy's view Gold miners spent much of the last decade ploughing profits into mine expansion in order to boost production amid declining ore grades and on the assumption that higher prices would justify such aggressive expansion. In the process, hedge books were eliminated in order to provide greater leverage to metal prices. However, the benefits of hedging production must be starting to look attractive once more following the deterioration in gold prices.

Newcrest Mining's accelerating deterioration is particularly noteworthy with prices halving again in the last three months. While this action is climactic, a clear upward dynamic is the minimum required to check momentum.

The NYSE Arca Gold Bugs Index broke downwards from its range last week to extend the downtrend. While it is drawing progressively closer to its 2008 lows, a break in the progression of lower rally highs would be required to question the consistency of the decline.