Citing unsustainable debt levels, ballooning interest costs and political uncertainties in Washington - Moody's now anticipates the U.S. federal debt burden will swell to 134% of GDP by 2035, up sharply from 98% in 2024. To put that in perspective, the U.S never exceeded 120% even at the height of World War II.

This downgrade marks a watershed moment - and history suggests it may carry serious implications for risk assets, while delivering a massive tailwind to safe-haven Gold.

According to Moody's projections, interest payments on U.S federal debt are on track to consume a staggering 30% of government revenues by 2035, while deficits are expected to widen to 9% of GDP - up from 6.4% this year. These figures cast a long shadow over the future of American fiscal credibility.

To quote GSC Commodity Intelligence - "the United States is now $36 trillion in debt - and that figure is growing by the day. This is an accelerating debt spiral with no way out."

This isn't the first time U.S creditworthiness has come under scrutiny.

In 2011, Standard & Poor's famously downgraded the U.S. from AAA to AA+, triggering a sharp market correction that saw the S&P 500 fall 10% in just two months. Fast forward to 2023 and Fitch echoed those concerns by issuing its own downgrade. The result? A 12% drop in the S&P 500 and a 17% plunge in the Russell 2000 over the next three months.

Meanwhile, Gold rallied - and this time, the setup may be even more explosive.