The Scary Number for Gold Investors: $1,200

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Many gold producers will struggle to stay afloat if the gold price slumps below $1,200 analysts have told CNBC, potentially putting the gold mining industry at severe risk beyond 2017, according to Goldman Sachs predictions.

The much talked about decline in gold continued on Monday, with spot prices falling $1,400, compounding fears the 12-year run in the precious metal has finally come to an end.

Gold miners were especially hard hit, with a sell-off in the sector in Australia, China and the U.K.

But at what point does the demise of the gold price make gold miners uninvestable?

"As you get closer to the cash cost production for gold, which is around $1,200 an ounce, people get nervous," Jonathan Barratt, founder of Barratt's Bulletin told CNBC.

(Read More: Why a Cyprus Gold Sale Isn't Being Take Seriously)

James Sutton, client portfolio manager of the J.P. Morgan Natural Resources fund, agreed, telling CNBC: "The level where we think the gold mining industry will struggle is $1,200."

While he said gold may not reach those levels, the fund was taking precautions, trimming its gold holdings to lows not seen since the financial crisis.

"Gold is now just over 20 percent in both the European and U.K. portfolios, which is a meaningful step change from where we were last summer when we had 31 percent, and it is the lowest weighting we have had in gold since the financial crisis," he said.

As mine production makes up just 10 percent of the gold industry, people could still gain exposure to gold through many different avenues, but many businesses extracting gold from the ground could fold, he added.

"It is around about the $1,200 we think the gold industry as a whole struggles, but there are many companies that can still survive and be profitable," said Sutton "If there was a further deterioration in the gold market, then our portfolio would become even more concentrated in those stocks that we thought were going to be the last men standing."

(Read More: Cyprus Central Bank Denies Plan to Sell Gold)

Goldman Sachs, which downgraded its gold price target and advised investors to short the precious metal last week, said its long term price forecast from 2017 onward is $1,200 and so recommended producers lock in current gold prices for 2013 and beyond.

"Over that horizon forecast, we expect U.S.real rates to stabilize and see risks to U.S. inflation as more symmetrical. And while higher inflation may be the catalyst for the next cycle in gold prices, this is likely to be several years away," analysts led by Damien Courvalin said.

(Read More: Goldman Closes Gold Position, Says Time to Short)

Gold Investors Battered

For investors in gold mining funds, 2013 has already been a very bad year.

Globally, gold mining and resource funds are down 10 percent on average in just the first quarter, before the latest falls,with the worst performing fund down 22 percent, according to investment research firm Morningstar.

In the U.K., eight out of the ten worst performing funds in first quarter were gold and resources funds with an average loss of 12 percent, compared to the FTSE 100, which rose 9.29 percent over the same period, according to Morningstar.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave