Did the San Francisco 49ers Strike Gold? SPDR Gold Trust (GLD), Barrick Gold Corporation (ABX)

Page 1 of 2

The gold rush of 1849 — whence the “49er” moniker derives — may be long over, but might the San Francisco 49ers’ loss during Super Bowl XLVII signal the beginning of the next move higher for the gold market?

According to a fanciful stock market prognostication tool known as the Super Bowl indicator, if the NFC wins, the market should be up for the remainder of the year, while an AFC victory signals a market decline. One of the biggest enemies of gold’s attempts to go higher over the last few months has been the strength in the stock market. By losing Sunday’s close-fought battle, the 49ers may have struck again.

Barrick Gold Corporation (USA) (NYSE:ABX)The indicator
Just to be clear, I am being tongue-in-cheek by suggesting that this is an indicator on which to base real trading decisions, but as it does have some psychological influence on how traders will at least start the week, it’s worth a brief look. The Super Bowl indicator, which was accurate 28 out of 31 years between 1967 and 1997, has an overall accuracy rate of about 75%. Adding to the fun is that it poses an interesting dilemma for this year’s winner.

But it gets confusing when you consider that the Baltimore Ravens’ history can be traced to the first Cleveland Browns franchise, which was in the original NFL before the AFL-NFL merger. Most teams in the old NFL became NFC teams after the merger — but not the Browns, which entered the consolidated NFL as an AFC team. If you wanted to take a purist position, you might argue that the team should be counted as an NFC team. However, as the San Francisco 49ers proudly represented the NFC, the honors this year must go to the AFC. As such, the uptrend in stocks should reverse if the indicator holds.

Good news for gold
Looking at a chart of gold, as represented by the SPDR Gold Trust (ETF) (NYSEMKT:GLD) , relative to the S&P 500, as represented by the SPDR S&P 500 , there has been strong negative correlation between the two markets. As stocks have ticked higher, gold has taken a break from its extended uptrend. A correction or reversal in the direction of the stock market should be seen as a major positive for precious metals such as gold.

GLD Chart

GLD data by YCharts.

Other positive news for the gold market is the general weakness that exists in the economy. Last week saw a negative print for the U.S. gross domestic product (GDP) and an uptick in the unemployment rate. While the market ignored the news, surging higher to close above 14,000 on the Dow for the first time since October 2007, it’s unlikely that the Federal Reserve missed the report. Remember that the Fed has vowed to keep the money-printing machine, also known as bond buying and quantitative easing, running full tilt until the unemployment rate falls below 6.5%. At this rate, I expect that the printing will continue until heavy inflation kicks in and sends gold higher.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!