Making Money With Gold is a Tough Business

The 10-year chart of the Philadelphia Gold & Silver Index (XAU) shows why it's difficult to make money buying and sell gold stocks. The XAU was on the downside from late 1995 through most of 2000. Then gold moved to the upside as indicated by the green uptrend line.

Percent Returns

For the 8,001 monthly buy and sell combinations from January 1, 1995 through July 2005, 3,166 (39.6%) made money and 4,835 (60.4%) were unprofitable. The 3-dimensional percent returns chart shows the winners in green and the losers in red.

The small green area in the front left of the chart represent the winning trades that occurred in 1995 before the XAU peaked. The large red area on the left side of the chart are the losing downside trades. The large green area in the center and right side of the chart are the buy and sell on the upside trades after the XAU bottomed in late 2000.

Winners and Losers Map

The winners and losers map shows the winning buy and sell combinations in green and the losers in red.