Daily Gold Market Report

Moody’s Downgrades U.S. Credit Outlook to Negative
Fiscal Deficits and Debt Challenges Ahead

(USAGOLD – 11/13/2023) Gold remains under pressure as investors react to Moody’s negative outlook on U.S. debt. Gold is trading at $1936.10 this morning, down $4.10. Silver is trading at $21.98, down 29 cents. Moody’s on Friday downgraded the outlook on the U.S. credit rating from “stable” to “negative,” citing concerns about large fiscal deficits and declining debt affordability. This change follows a similar downgrade by Fitch earlier in the year, related to political tensions around the U.S. debt ceiling. Investors are increasingly worried about federal spending and political polarization, which have contributed to a significant drop in U.S. government bond prices. Despite this outlook change, Moody’s affirmed its top ‘Aaa’ long-term issuer and senior unsecured ratings for the U.S., acknowledging the nation’s credit and economic strengths. However, the agency noted that political polarization in Congress increases the risk of lawmakers failing to agree on a fiscal plan to improve debt affordability, with significant policy responses unlikely before 2025 due to the political calendar​.

USAGOLD Comment: A downgrade in a country’s credit rating can indicate increased sovereign risk. Gold is considered a non-sovereign asset, meaning it is not directly impacted by the financial health of any single country.