17
Nov 2023
Moody's downgrades U.S. credit rating outlook
Moody’s downgrades U.S. credit rating outlook to negative
Late last Friday Moody’s downgraded its outlook on the U.S. credit rating from stable to ‘negative’.
“Moody's assessment is that the downside risks to the US' fiscal strength have increased and may no longer be fully offset by the sovereign's unique credit strengths,” stated the release.
October’s Consumer Price Index released Tuesday
On Tuesday, the Consumer Price Index for October remained unchanged from September. Over the last 12 months though, the CPI is up 4%. At its height CPI increased to 9.1% in June of 2022. Gold rallied on the news, interpreting the data as being the air cover the Fed needed to stop raising rates.
Gold Priced in World Currency Unit continues to rise
Gold priced in a basket of World Currencies, a value used to indicate global demand for gold outside of the US, is at all-time highs. Additionally, the rate of gold’s price increase in foreign currencies is now accelerating, suggesting foreigners like central banks are concluding it is increasingly urgent to diversify into gold.
Analysis
A decrease in the U.S.’s credit rating outlook is one more recent event pointing to plummeting confidence in the U.S. bonds and ultimately the dollar. Last week the Treasury struggled to sell bonds at the desired rate and was forced to pay a higher than targeted coupon. Foreign governments and banks are selling off U.S. bonds and purchasing physical gold as they lose faith in the U.S. dollar.
Additionally, even though CPI remained stable from September to October, consumers are still facing fairly large 12-month inflation and dramatic 24-month inflation. The decrease in purchasing power over the last 24-months has been speculated by some to be the equivalent of losing $7,000 in income for the average American family.
The World continues to lose faith in the U.S. dollar. As foreign entities flee the dollar, they are flocking to something they know will be stable, gold.
We always recommend investors hold a certain percentage of gold in their portfolios, but history tells us that during times of inflation, market fluctuations, and political uncertainty, that gold’s role becomes even more valuable.
Don’t wait, call one of our knowledgeable wealth advisors today to get started. They are happy to answer your questions and provide you with guidance on how you can use gold to better protect your family and your future.
Late last Friday Moody’s downgraded its outlook on the U.S. credit rating from stable to ‘negative’.
“Moody's assessment is that the downside risks to the US' fiscal strength have increased and may no longer be fully offset by the sovereign's unique credit strengths,” stated the release.
October’s Consumer Price Index released Tuesday
On Tuesday, the Consumer Price Index for October remained unchanged from September. Over the last 12 months though, the CPI is up 4%. At its height CPI increased to 9.1% in June of 2022. Gold rallied on the news, interpreting the data as being the air cover the Fed needed to stop raising rates.
Gold Priced in World Currency Unit continues to rise
Gold priced in a basket of World Currencies, a value used to indicate global demand for gold outside of the US, is at all-time highs. Additionally, the rate of gold’s price increase in foreign currencies is now accelerating, suggesting foreigners like central banks are concluding it is increasingly urgent to diversify into gold.
Analysis
A decrease in the U.S.’s credit rating outlook is one more recent event pointing to plummeting confidence in the U.S. bonds and ultimately the dollar. Last week the Treasury struggled to sell bonds at the desired rate and was forced to pay a higher than targeted coupon. Foreign governments and banks are selling off U.S. bonds and purchasing physical gold as they lose faith in the U.S. dollar.
Additionally, even though CPI remained stable from September to October, consumers are still facing fairly large 12-month inflation and dramatic 24-month inflation. The decrease in purchasing power over the last 24-months has been speculated by some to be the equivalent of losing $7,000 in income for the average American family.
The World continues to lose faith in the U.S. dollar. As foreign entities flee the dollar, they are flocking to something they know will be stable, gold.
We always recommend investors hold a certain percentage of gold in their portfolios, but history tells us that during times of inflation, market fluctuations, and political uncertainty, that gold’s role becomes even more valuable.
Don’t wait, call one of our knowledgeable wealth advisors today to get started. They are happy to answer your questions and provide you with guidance on how you can use gold to better protect your family and your future.
