America’s credit isn’t as good as it used to be. In a surprise announcement, Moody’s Ratings downgraded the U.S. government’s credit in mid-May. Moody’s Ratings was the last of the three major ratings agency that had given America access to the exclusive Triple-A club. No more.

Moody’s downgraded its credit rating of the United States to “Aa1” from “AAA.” The firm pointed to rising debt and interest “that are significantly higher than similarly rated sovereigns.”

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s said. “We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

What Is a Credit Rating?

When you apply for a new credit card, the financial institution looks at your credit score. For a nation, a credit rating is an assessment of the government’s ability to repay its debt, like the Treasury bonds and notes that it sells.

The highest rating is AAA, and then ratings move lower indicating default risk from AA to BBB to C and lower. For governments, a high credit rating signals strong fiscal health and a high likelihood of repaying debts on time, while a lower rating suggests increased risk for lenders and investors.

Why Does the U.S. Credit Rating Matter?

The U.S. credit rating is important because it directly impacts the cost of borrowing for the government. When our nation carried an AAA rating, it could borrow money at the lowest possible interest rates, as investors saw our debt as virtually risk-free.

A downgrade signals to investors that lending to the U.S. is slightly riskier, prompting them to demand higher interest rates to compensate for that risk.

Bottom line? A lower credit rating means higher borrowing costs when the U.S. government auctions off Treasury bond and notes to pay our national debt. This can also lead to higher borrowing costs for consumers since U.S. Treasury yields serve as a benchmark for many other interest rates throughout the economy.

What Does a Downgraded Credit Rating Mean for the U.S. Economy and You

Looking ahead, this news could have real-life consequences for our government and everyday Americans including:

Higher Borrowing Costs: The U.S. government may have to pay more to borrow money, which can increase the federal deficit over time

Rising Interest Rates: As Treasury yields rise, so do rates on mortgages, auto loans, and corporate debt, making borrowing more expensive for households and businesses

Market Volatility: Downgrades can unsettle financial markets, causing volatility in stocks, bonds, and currencies as investors reassess risk

The 2011 U.S. Credit Downgrade and Its Impact on Gold

Looking back, the first-ever downgrade of the US credit rating occurred in August 2011, when Standard & Poor’s lowered the U.S. from AAA to AA+

This downgrade unfolded amid intense political standoffs in Congress over the U.S. debt ceiling and sent shockwaves through the stock market and gold soared to record highs. Investors turned to the safety of gold as the U.S. government’s credit-worthiness was questioned, which led to bigger questions about the stability of the U.S. financial system.

What Could the Latest Downgrade Mean for Gold Now?

In August 2023, Fitch lowered its US credit rating from AAA to AA+. And, now Moody’s has also lowered theirs. The news underscores the stability and security of gold in a world racked with government debt.

For gold investors, this helps underscore that gold is in a structural bull market. Analysts at JP Morgan issued a new research note in mid-May outlining a scenario that could take gold 80% higher to $6,000 by 2029. They said this could occur if just 0.5% of U.S. assets held by foreign investors was reallocated gold.

Do You Own Enough?

Never before in history has there been such a strong case for gold ownership. With rising government debt, political brinksmanship, and concerns about fiscal sustainability, gold acts as a safe haven, a store of value and a vehicle to grow your wealth. It’s easy to increase your wealth protection with an increased allocation to gold. Why not do it today?

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When you shop at Target, Walmart, or Costco, you probably don’t think much about the journey the items you buy have taken.

It turns out that things made in China can travel up to 10,000 nautical miles to arrive on U.S. soil. Cargo ships carry everything from laptops, smartphones, furniture, lamps, clothing, toys, sports equipment, shoes, and more to the U.S., eventually landing in your neighborhood stores.

Since early April, when the U.S. added a 145% tariff on goods imported from China, cargo ship traffic has slumped. About 40 cargo ships are en route from China to the U.S., but that number is down by about 40% just before the tariffs were instituted. Those ships carry about 320,000 containers, according to Bloomberg. That’s about a third fewer than just before the 145% tariff was set.

Looking ahead, cargo ship traffic could slow even more. In late April, Hapag-Lloyd AG, the world’s fifth-largest container carrier, stated that approximately 30% of bookings from China to the United States have been cancelled.

While the trade war is still young, and although the U.S. has said the tariff rate on China will come down, trade is slowing now.

What does this mean for you, the economy, and gold?

By the middle of May, thousands of American companies, even giant retailers like Target and Walmart, will need to replenish inventories. Experts predict we may begin seeing empty shelves at some of your favorite stores in a couple of weeks.

The U.S. is a consumer-led economy. By some accounts, consumer spending creates roughly 70% of our gross domestic product. For the economy, the math is simple. Fewer goods to sell means less spending, slowing economic growth.

What about gold? The precious metal has soared almost 30% since the start of the year, at least partly fueled in large part by safe-haven buying amid stock market volatility, concerns over a recession, and the impact of the tariffs on the economy.

The price of gold keeps hitting record after record, recently surpassing $3,400 an ounce, and it’s still climbing. Many on Wall Street, including J.P. Morgan and Goldman Sachs, expect gold to hit $4,000 by 2026. However, given how fast gold has been climbing, $4,000 could come even earlier.

While many Americans haven’t yet seen firsthand the impact of the trade war, it could be coming within a few weeks. Logistics experts warn that springtime is when retailers begin placing orders for back-to-school and Christmas inventory. In a typical year, the first holiday shipments would be hitting the water and starting that journey by mid-May. For now, many of those orders have been canceled or are on hold.

While the jury is still out on any tariff deal between China and the U.S., fewer goods are coming to our country now. While that may put a crimp in back-to-school shopping, it will continue to support the historic climb in gold prices. Do you own enough?

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The Federal Reserve kept its key interest rate steady at 4.25-4.50% when it met on Wednesday. Nonetheless, Fed officials issued an unusually frank warning about what could lie ahead.

“Uncertainty about the economic outlook has increased further,” Fed officials said. “The committee… judges that the risk of higher unemployment and higher inflation have risen.”

How markets reacted 

Gold traded sideways following the Fed’s meeting, while stocks traded lower. Gold has climbed over 26% since the start of 2025 as world investors have piled into the safety of gold.

The trend for gold points higher with major banks projecting big gains ahead for the precious metal. In a new research note today, Bank of America said it sees growing potential for gold to hit $4,000 an ounce in the second half of this year because of global trade-induced geopolitical uncertainty.

Quick primer: How the Fed uses interest rate policy 

One of the main tools in the Fed’s toolbox is raising and lowering its key interest rate.

• Lowering interest rates helps boost an economy that is slowing down
• Raising interest rates helps tamp down inflation

• Sixty-five percent say the stock market will suffer a decline of 20% or more.
• Only 26% of money managers are bullish on the stock market over the next 12 months.
• Twenty-four percent say the biggest risk for the stock market over the next 6 months is an economic slowdown
• Nineteen percent say a recession is the biggest risk for the market over the next 6 months

Governments and investors worldwide appear to be losing confidence in the U.S. dollar and U.S. Treasury bonds. The start of a new global trade war has rattled the world as the rules around the global economic order have starkly changed in a matter of weeks. America’s move toward highly protectionist policies has triggered a stock market crash, a 9% decline in the U.S. dollar this year, and U.S. Treasury bonds are down too.

As the world’s financial faith in the U.S. has been rattled, global investors are pulling out of U.S. assets. Why is this significant?

In the past, during times of economic and financial crisis, investors around the globe bought the U.S. dollar and U.S. Treasury bonds as safe-haven investments. Now, they are selling the U.S. dollar and selling U.S. bonds.

Gold has now moved to the top step as the world’s ultimate safe-haven asset. In April, gold set new all-time highs above $3,400 an ounce as the flight to safety poured into the precious metals markets.

It’s worth considering that the U.S. policies are changing at a time when our nation owes a lot of money. The U.S. national debt tops $29 trillion. In fiscal year 2025, the Congressional Budget Office forecasts a budget deficit totaling $1.9 trillion. To fund our deficit and debt, our nation relies on capital inflow from foreign governments and investors.

In a new economic world order where the U.S. isn’t seen as a reliable partner, it makes sense for foreign investors to diversify their holdings away from U.S. assets, experts say. Indeed, it’s already starting to happen. According to Bank of America, foreign investors accounted for a smaller share of buyers at March Treasury auctions.

Foreigners own roughly 20-30% of the U.S. stock and bond markets, totaling about $19 trillion of U.S. equities, $7 trillion of Treasuries, and $5 trillion of U.S. corporate bonds, according to Apollo Management. A wholesale reversal of capital inflows to American markets could cause significant economic pain, fresh stock market losses, and significantly higher interest rates.

In the meantime, gold is increasingly seen as the only safe haven game in town. Goldman Sachs Group now projects that gold could climb to $3,700 by the end of this year. If the U.S. economy slips into recession, the firm projects gold hitting $3,880 this year. Looking into the middle of next year, Goldman expects gold to climb to $4,000 an ounce.

The U.S. economy isn’t out of the woods yet. The dust hasn’t even begun to settle. In closed-door meetings at the White House, the chief executives of Walmart and Target privately warned the President that tariff policy could result in empty shelves in their stores in the weeks ahead. If you are looking to take steps to protect your hard-earned assets, explore our gold inventory now. Gold at $4,000 may be here faster than you expect.

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Gold’s record-breaking rally is continuing at breakneck speed as the tariff war with China escalates. The precious metal has surged roughly $700+ an ounce this year, driven higher by the tariff war, concerns over the potential for global recession, and expectations that the Federal Reserve will cut rates.

As many investors seek safety amid a stock market crash and reshuffling of the geopolitical and economic world order, gold investors may ask: What comes next?

In a matter of weeks, gold has breached the $3,400 an ounce target set by many Wall Street firms for 2025. However, many economic experts warn that the global order is undergoing a regime change, with outcomes and results that aren’t known yet. That has dramatically increased interest in the safety and security of gold as a store of value, a hedge against inflation, and a vehicle to protect wealth.

Here’s what some of the Wall Street pros are saying now.

“In the short to medium term, a combination of heightened global economic tensions, the risk of stagflation, and a weaker dollar may continue to support bullion. We raise our 2025 forecast for gold to USD 3,500 per ounce.” Saxo Bank – April 16, 2025

Forty-two percent of fund managers expect gold will be the best-performing asset of 2025, according to Bank of America.” – Yahoo Finance, April 16, 2025

“We’re putting in a pretty good base now around $3,000,” Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. “It’s going to head into $4,000.” Kitco News – April 14, 2025

“A bunch of factors could push gold still higher,” said Michael Cuggino, president and portfolio manager of Permanent Portfolio Family of Funds. “They include U.S. political uncertainty, buying of gold by foreign central banks, the risk of U.S. inflation, lower interest rates, and a weakening dollar. All of these things add up to a pretty strong case for gold.” – Barron’s, April 14, 2025

Gold $6,000?

“Gold could double over the next five years. It is always a ballast in a portfolio, and it is inversely correlated to other assets, so it is an effective hedge,” said David Rosenberg, founder, Rosenberg Research & Associates, who was one of the few who predicted the global financial crisis of 2008-2009.

“If you reset global trade and want to talk about the laws of unintended consequences, for the first time in my life, the U.S. could relinquish its reserve currency status. That is on the table,” Rosenberg said.

“What would replace the dollar is an open question, but this is the road we are being led down. And if we start to have this reset of global trade, a $6,000 view on gold within the next five years could end up being a conservative estimate. So, I still like gold.” – Barron’s April 15, 2025

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