Gold Prices Target $1,900 as Oil Continues to Plunge

Gold Prices

The start of the week saw gold prices reclaim the $1,700 level after hitting support levels late last week.  The precious metal was also aided by crashing crude oil prices and continuing concerns regarding coronavirus-induced damage to the economy.

Gold hit its lowest point since April 9 at the end of last week due to reports of new treatments for COVID-19.  The price was back to approaching $1,700 by midday Monday though, hitting $1,692, with futures also climbing to $1,709.

That could just be the beginning of a continued upswing for precious metal investors however, with TD Securities issuing a target of $1,900 an ounce in a mere three months from now.  The reasons for the jump are primarily the anticipation of continued safe-haven demand amid market uncertainty and the continued stimulus efforts of central banks.

There is also the belief among analysts that the market is currently undervaluing gold, especially when taking into account the expected long-term inflation and the overall scale of global quantitative easing.

Bart Melek, TD Securities’ Head of Commodity Strategies, explained how “The Fed’s latest QE program is now the largest on record. Of course, there is a well-known relationship between QE and lower real rates, such that it ultimately suppresses real rates by lifting inflation expectations at a faster pace than nominal rates … The Fed and other central banks are likely to keep their uber-easy policies in place for far longer than anticipated, following a decade of below-target inflation and a newfound interest in asymmetric inflation targeting,”

Melek had good news for gold investors moving forward though, saying that “Gold has been very much subject to what has been happening in the broader market … There will be a positive view of the economy going forward as things open up and given all the massive amounts of monetary and fiscal stimulus, the market will turn to gold as a protector against inflation.”

He added that he sees the price of gold reaching $2,000 an ounce by the end of next year.  The key will be at the point when the U.S. begins to see some economic stability again, but while interest rates are still low.  That’s when inflation will come into play. The bigger the problem that inflation is, the higher gold prices will go. Melek sees gold climbing all the way to $2,100 if the inflation is severe enough.

The precious metal has also been helped by a fading dollar and a freefall of crude oil prices.  These factors indicate that investors’ appetite for risk is dwindling, and has helped overcome the optimism concerning a possible vaccine and the easing of global lockdowns, both of which have had a negative impact on the bullion markets recently.

Oil Prices

Oil prices, in particular, have had a tremendous positive impact on gold.  The crude oil market is continuing to experience astounding losses, with prices at their weakest levels on record.  In fact, experts are not ruling out negative prices. Global lockdowns have helped kill the demand for a commodity that was already hurting due to a price war between Russia and Saudi Arabia.  OPEC+ recently cut a major deal to limit output and reduce oversupply problems, but that now seems to be a case of too little and too late. Seeing a leading commodity collapse has only driven up the safe-haven demand for gold among investors, amid a market that has already been plagued with anxiety.

In the very short term though, one can still expect the bullion market to still be somewhat sluggish as investors brace for quarterly earnings reports.  Roughly 20% of the S&P 500 will report earnings this week, and analysts are expecting the worst results year-over-year since 2009.

Wall Street stumbled out of the gate to start the week as well, even before the release of any earnings reports.  Energy shares in general were hit hard by the crash in oil prices, and the market in general saw a wave of pessimism wash over it as more and more economic data is expected that will detail the severity of the pandemic’s impacts.

The dollar had been gaining momentum in recent weeks thanks to bits of positive news regarding the coronavirus.  Gilead Science’s experimental drug remdesivir has seen some success in combating the virus, but it is far from being fully vetted and tested yet.  Similarly, Novartis said it is now conducting late-stage trials of hydroxychloroquine in patients with COVID-19. The start of roll-backs of quarantine restrictions in some European nations, including Germany, boosted the dollar as well, as did hopes that the global containment measures could soon start to be lifted.

That momentum was short-lived however, and the dollar’s gains started to fade by lunchtime on Monday.  Now, commodity experts are looking to the longer term, where the uncertainty around restarting frozen economies seems set to continue for at least a few more months.  Couple that with the ever-increasing belief that we have now entered a global recession, and one is left with strong support for gold in the medium to long term. Craig Erlam, Senior Market Analyst at Oanda, supports this line of thinking, saying how “the longer-term outlook for the yellow metal remains bright though given the current environment.”

Long story short, experts expect the price of gold to continue to stay strong as long as the coronavirus is dominating the headlines.  Fears of a global recession will persist along with it, as interest rates approach zero or lower. All of this is great news for gold, and the bullish signals show no signs of letting up.

More and more savvy investors are turning to gold as a safe haven, and it’s not too late to get in at what is still a relatively low level.  Even if the coronavirus is eradicated in a few months, which is now the best-case scenario, many of the world’s top economies are still in serious trouble and becoming more and more susceptible to inflation.  By investing in gold, you’re not only protecting your portfolio from the volatility of the markets, but you’re setting it up for significant future growth as the global economy inevitably rebounds post-pandemic.

At Regal Assets, we believe in providing you with trusted and proven precious metal investment options.  We take pride in the way we do business and have enjoyed helping our clients grow their portfolios for over a decade now.  Our expert team members work side-by-side with you every step of the way, so you can be sure that your wealth is safe and in a position to grow.

See for yourself what we offer with our FREE Investor’s Kit.  It explains Regal’s IRS-approved investment options and how they work.  We’ll help you choose the right strategy to achieve your goals.

 

Why 2020 Looks To Be The Year Of Bitcoin & Business

More And More Enterprises Are Starting To Leverage Bitcoin Technology

Bitcoin is by far the most popular digital asset in the world, with it consistently maintaining nearly 70% dominance over the entire cryptocurrency market cap.
In 2019, we saw yet another year of explosive Bitcoin price increases and further adoption around the world.  Overall though, this has been the year of the institutional Bitcoin. We saw the birth of multiple Bitcoin products from the institutional trading world, such as Bakkt’s physically delivered Bitcoin futures, Fidelity Digital Assets Bitcoin custody solution and TD Ameritrade’s trading offerings.
It’s no wonder why.  In the ever-growing digital asset space, Bitcoin has the best available trading options for both spot and derivatives, it has the longest proven track record, and with that the largest pool of data.

So where does Bitcoin go from here?

The next step on Bitcoin’s path to world domination is in the business world.
As companies look to develop their payment systems and networks, more and more are turning to blockchain technology as a solution.  It offers faster and easier payments over secure networks, with processes built around smart contracts.
Until now, most of the business-based blockchain developments have been done on private and proprietary blockchain protocols, such as R3’s Corda and Hyperledger Fabric.  This allows businesses to customize their blockchain from the ground up, so in theory, they can provide themselves with top tier privacy, scalability, and transaction completion guarantees.  The downside is that developing your own blockchain from the ground up can be very costly, and consumes a great deal of time and personnel as well.
Is all of that really necessary anyway, when a proven network like Bitcoin already exists?  Development on top of the Bitcoin blockchain wasn’t seriously looked at as a credible option by most major businesses until this year when Microsoft announced their new plans this past May.  Their permissionless, Decentralized Identifier (DID) network, christened “ION”, is being designed to run completely on top of the Bitcoin blockchain.
This bold new direction from one of the world’s technology titans triggered a massive shift in the mindset of enterprise developers and is making the prospect of integrating Bitcoin into enterprise development more attractive by the day.  Companies such as Bitfury have already made huge strides with enterprise-focused blockchain solutions such as their blockchain as a service (BaaS), which uses Bitcoin as a base layer.
So what exactly makes Bitcoin such a great option for enterprise-ready development platforms?  The reasons are plentiful:

• Data integrity – Bitcoin is the most trusted and secure public blockchain.  It’s secured by 97 quintillion hashes per second, a mind-boggling number. It’s also a top priority of Bitcoin’s own developers, and they have shown to be extremely cautious and restrictive about making any changes that could possibly introduce new security issues and compromise the protocol.  It’s also easy to analyze the data with a number of easy-to-use blockchain explorers and surveillance tools available.
• Smart contracts – Back in 2010, opcodes were taken out of the Bitcoin that led to the prevention of smart contract implementation.  Recent developments have changed all of that though, with projects like Blockstream’s Liquid and the new RSK framework, Schnorr signatures, and Taproot will make smart contracts–like executions possible via sidechains.
• Reduced costs – With the Lightning Network now existing as a Layer 2 protocol on top of Bitcoin’s blockchain, transactions and payments are now cheaper and faster than ever without compromising security in the slightest.
• Increased transparency – A native feature of the Bitcoin blockchain.  The developers have stayed away from privacy features seen in other public protocols like MibmelWimble, STARKs, and ZK-snarks.  This is a positive, as these features can make transactions difficult to audit and verify, something business wouldn’t be happy about.

Development on top of the Bitcoin blockchain looks poised to accelerate in the coming year, helped by the critical first-mover advantage and the fact that Bitcoin’s developers aren’t being forced to solve growth issues such as the ones Ethereum and EOS are currently facing.  Add to that the fact that the security concerns that top executives have with the public nature of the blockchain can be solved in the Layer 2 areas. Finally, another blockchain concern, which is the interoperability Bitcoin networks, can be solved using Keep’s tBTC or an Interledger Protocol (ILP) bridge.
As we’ve seen, the Bitcoin protocol has a wide array of advantages of its competition, and that gap will only continue to increase as development speeds up.

What does this mean for the average investor?

As more and more businesses get involved in Bitcoin, it means more and more businesses will purchase Bitcoin.  Which, of course, will naturally lead to further increases in price.
With so many indicators pointing to an incoming bull market in the next few months, now is the ideal time to buy.  Not only are you getting in at a bargain-basement price with the potential for huge growth, but you’ll be protecting your assets as we head into a very uncertain and unpredictable 2020.  Don’t miss out on this opportunity. Act now and reap the benefits.

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7 Signs You Need To Fire Your Financial Advisor

How To Recognize If You Should Be Making A Change

It’s a nightmare scenario for any investor.  You stash away your money and assume it’s being managed properly, only to find out later that a huge chunk of it has been lost to commissions, fees, and bad investments from your financial advisor.  Sadly, this happens far too often, decimating the retirement funds and futures of the victims.

At Regal Assets, our team of experts has decades of experience in the financial sector.  We’ve seen it all, both the good and the bad, and have learned a great deal of valuable lessons as a result.  By knowing what to look for ahead of time, you’ll be ahead of the game and in a position to protect and grow your wealth when working with your financial advisor.

Whether you currently have one and are wondering if they’re actually the best option for managing your assets, or if you are thinking about hiring a financial advisor for the first time and want to know what to look for, our list of red flags will tell you exactly what you need to know and avoid.

Lack of Transparency

Financial advisors should be generally be open and honest with you.  It is a partnership between them and yourself, after all. This transparency should include their fees structure and how they are compensated.  Some charge a flat fee per service, some an hourly fee based on how much time they spend with your portofolio, or some take a percentage of your total assets.  Others, and these are the ones you should stay away from, get a commission every time they sell a certain product.

Regardless, they should tell you exactly how they’re paid.  Don’t be afraid to ask questions if you don’t understand something, either.  If they won’t answer or try to give you the runaround, then look elsewhere. Mike Jurs, director at Financial Engines, a San Francisco-based independent financial advisory service says “Don’t worry — you’re not being rude, it’s almost expected. After all, it’s your money and you should be sure that your advisor has your best interests at heart.”

Transparency should also extend to documentation regarding your investments.  You should receive some sort of written pledge that states they will disclose any sort of conflicts of interest.  They should also send you monthly statements summarizing deposits, withdrawals, and currently held positions. It should come from your brokerage firm or custodian, not your advisor’s office (some of the most common custodians include Fidelity, Charles Schwab, TD Ameritrade).

They Always Agree With You

A people pleaser does not make for an ideal financial advisor.  If you’re finding that they always agree with you no matter what you say, then that’s a huge red flag.  You should be hiring a financial advisor for their financial expertise and advice. They shouldn’t be afraid to challenge what you say while explaining why their viewpoint differs from yours.

Even if they do agree, they shouldn’t do it immediately and without any thought.  They should think about and consider what you say and give details that support their response.  If they just blindly say “yes”, then they aren’t keeping your needs in mind. It’s essentially as bad if they ignored you altogether.

No Credentials

Certified Financial Planners and Investment advisors must adhere to specified standards and be aware of the relevant regulations.  They should also have the proper credentials and subsequently passed the appropriate tests to receive CFP certification. Make sure to ask your prospective advisor if they have these qualifications.  You can always call the Certified Financial Planner Board of Standards to verify, as well.

If an advisor has trouble explaining basic concepts to you, or if they always seem to need to get back to you later with answers, then it could possibly be a sign that their knowledge isn’t up to snuff and they are missing key qualifications.  The certification process for financial planners requires them to demonstrate their knowledge and pass a rigorous exam requiring an enormous amount of study, so they should know their stuff inside and out before bringing on clients.

They Ask For a Check Made Out Directly To Them

We are getting into straight up “scam” territory, here.  This should be considered the ultimate warning sign. If they ask you to write them a personal check, never ever do it.

A financial advisor was just recently accused of doing just this in Texas.  He had actually been an advisor in his town for many years and had built a solid reputation for himself.  But then the time came when he began exploiting his elderly clients. He told them he was selling annuities.  They trusted him and considered him a friend, so they wrote him a check made out directly to him. Guess what?  He disappeared soon after, swindling his clients out of hundreds of thousands of dollars.

If you’re writing a check at any point, make sure it is to be payable to an institution, not an individual.

They Don’t Have Time For You

Your financial advisor should be client-focused, which means that the client is their top priority.  This should include a clear line of communication with timely and professional responses. If your advisor doesn’t make you feel like your a priority, then you should think about switching.  Your finances should be their top priority, since it’s literally their job.

They also shouldn’t be too busy to meet.  Many advisors only meet with their client’s once a year to discuss their portfolios.  If you’re a hands-off investor and are comfortable with the state of your assets, then this might be fine.  But many people want to keep a closer tab on their wealth, and to that end you should go with an advisor that’s willing to meet more often.

When your deciding on an advisor, ask them about how frequently you can meet, and whether or not they’re ok with phone calls or emails in the meantime.  You may have a question or a problem, or maybe you just want to change your investment strategy. By having a responsive advisor, you won’t have to wait weeks or months until your next meeting.

No matter what, they should still have the time for a return email or call, even if they can’t necessarily meet right away.  Pedro M. Silva, a financial advisor at Provo Financial Services, in Shrewsbury, Ma., says “Depending on the size of the account and how the advisor has scaled his or her practice, clients might not be contacted as often as they would like, but a return call or email should be a basic courtesy in any industry.”

Inflated Ego

The vast majority of those seeking a financial advisor do not work in the finance industry.  It makes sense. If you already knew all about investing then you wouldn’t need help. This means that, especially when starting out, clients will often have a bunch of questions for their advisor.

How your advisor responds will tell you everything you need to know about them.  One that doesn’t like or encourage questions should be avoided. Even worse is an advisor that gets aggressive when you challenge them.  A good advisor should always listen to what you have to say and come back with a clear explanation in a respectful manner.

Likewise, a financial advisor shouldn’t make excuses when things aren’t going well.  You want an advisor that takes responsibility for mistakes, and is open and honest about why they did what they did.  No one is perfect, but if they’re making decisions with sound logic and your best interests in mind, then that’s what you ultimately want.

They Talk At You, Not With You

Your financial advisor and yourself should have a healthy relationship with one another.  They are there to work with you and give you advice, not take control. It’s your money, after all.  The way to do this is to maintain clear two-way communication with your advisor.

If your advisor avoids conversation, tries to steer the discussion in their own direction, or uses a ton of buzzwords and jargon, then you should be concerned.

It’s also a worrying sign if your advisor talks down to you.  If you aren’t a financial professional (which is most likely the case), then it’s perfectly OK to not be familiar with certain terms or products.  It’s the advisor’s job to explain the details to you and help you understand it. If they can’t or won’t do this, then they aren’t going to be very helpful to you.

At Regal Assets we believe in providing you with trusted and proven investment options.  We take pride in the way we do business and have enjoyed helping our clients make the most of their money for over a decade.  Our expert team members will work side-by-side with you every step of the way, so you can be sure that your assets are both protected and in a position to grow.

See for yourself what we can offer with our FREE Investor’s Kit. It explains Regal’s IRS-approved investment options and how they work. We’ll help you choose a strategy that’s right for you, so you can achieve your goals.

FREE Investor’s Kit.

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