The pressure on gold prices is hard to ignore. But some aggressive investors see this as an opportunity, and are talking about catching a falling knife in gold amid the negativity.

That’s a surefire way to lose some fingers (or maybe a whole arm) if this keeps up. And gold miners are particularly toxic because even if gold does firm up, these companies could be cooked for quite some time.

The bull case is easy to understand, of course: with ultra-low valuations and ugly declines as of late, the negativity is priced in and this is your shot to buy. You know, blood in the streets and all that.

Also, some industry insiders think gold production is break-even right now — that is, market value of the metal at under $1,300 per ounce is on par with the cost it takes to extract gold from the ground at many mines. That’s a pretty compelling case for a floor in gold since companies won’t keep mining just to bleed cash, and supply may adjust to demand as a result.

But don’t fall for the glitter of gold and gold miners. Here’s what’s working against those investments right now:

Fund flight

Say what you want about “paper gold” — the securitization of the precious metal allows many more investors to sell and move their money, and that has resulted in rapid declines that don’t look like they will abate anytime soon. About $55 billion has been erased from exchange traded gold products like the SPDR Gold Trust GLD, -0.54% since January — and just like a squeezed trader on a margin call, gold fund managers have to sell into downward momentum to pay for redemptions. That leads to further decline, cascading redemptions and a lot more pain to come for gold prices in 2013.

No safe haven

Gold has been a safe haven in the minds of many, but the more than 25% decline from last September has shaken this idea to the core. Also, Treasurys are in favor again as rates tick up to 2.6% — more than 100 basis points higher than 12 months ago and significantly higher than the S&P’s dividend yield of roughly 2.0% right now. If you’re looking for safety, anything relating to gold ain’t it.

Writedowns

Newcrest Mining NCMGY, -0.04% wrote down the value of its mining reserves by $5.5 billion. This is not unheard of to mark down mine values, but the sheer size of this transaction — the biggest one-time charge in history for the gold mining industry — is noteworthy. Bloomberg data show about $17 billion in writedowns for miners across the last year and a half, according to BusinessWeek, and there are fears major players like Barrick Gold Corp. US:ABX and Newmont Mining Corp. NEM, -1.44% may write off mine values next and push that figure even higher. It’s hard to say a stock is undervalued when the value keeps moving down.

Bad buyouts

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Cumbersome and inefficient operations have resulted from a race to acquisitions in the last few years. In 2011, Chinese corporation Shandong Gold 600547, +0.03% purchased a Brazilian miner for $1 billion, and then state-owned China National Gold Corp. bought a major stake in African Barrick Gold for $3.9 billion in 2012. Billionaire Carlos Slim and his Minera Frisco MSNFY, +123.68% operation bought out a competing Mexico miner in for $750 million last year. Kinross Gold KGC, +0.21% bid $7.1 billion for the rest of Red Back Mining in 2010. The list goes on — and all those ill-timed acquisitions meant to tap into new reserves have simply resulted in more costly operations and thinner margins for many miners.

Even if gold comes back, miners may not

Here’s the dirty little secret about miners even if you think all these previous points don’t matter — that the idea of gold miners as amped up gold plays has been pretty much debunked. Consider that while gold has underperformed, it is still up handily since January 2009 when it was trading around $500 — and that the bullion-backed GLD ETF is up 40% since then. Not bad. Meanwhile the Market Vectors Gold Miners ETF GDX, -1.75% has crashed over 25% since 2009. Even more damning is that since late 2011 when gold was trading around $1,900 an ounce, bullion is down roughly 30% — but the GDX miners fund is down double that with 60% losses in the same period. What makes you think, given this track record, miners are a good buy even if gold moves higher?

I am bearish on the precious metal, and think it will drift sideways at best. On May 22 I warned that gold prices would not make a comeback and gold has given up more than $120 since then.

But even if I’m wrong and gold ticks higher, gold mining stocks could continue to cave in. Avoid this sector at all costs.

Jeff Reevesis the editor of InvestorPlace.com. Follow him on Twitter@JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.