Gold mines cutting output offers little relief

London

FOR most raw-material producers, less supply can mean higher prices and more profit. Not so much for gold.

With bullion near a five-year low and investors unloading metal they hoarded for about a decade, some mining companies are losing money and output is poised to drop for the first time since 2008. If history is any guide, the cutbacks will have little impact on the market.

Gold is viewed mostly as a financial asset, from bars and coins to jewellery passed down to heirs, and every ounce ever dug up from the earth is still in existence, with recycled metal accounting for more than a quarter of annual supply. When mines last trimmed operations, bullion still slid as …