America's long-term debt isn't the only thing that's been slapped with a recent downgrade.

Bank of America Merrill Lynch's Global Commodity Research team announced that they've rebalanced their actively managed commodity indices in favor of non-cyclical commodities such as gold. The team downgraded oil in their indices and warned that the price of crude will continue to put a drag on the global economy.

"In response to recent disappointing macro data, the U.S. and European debt crises and the sharp correction in risk assets, we shuffled our active indices to express a bearish view in highly cyclical commodities such as crude oil and copper," an analyst with BofA Merrill Lynch, Francisco Blanch, said.

Merrill Lynch's commodities analysts said that the last two times that energy as a share of GDP neared 9 percent - roughly the current level - the world economy faced the double-dip recession of the 1980s and the Great Recession of 2008.

A recessionary environment could create an oil demand contraction of as much as 0.4 million barrels per day next year -a marked difference compared to the bank's current projection of positive demand growth of some 1.5 million barrels per day this year. Such a drop in consumption would, in turn, make for a significant output reduction. For example, economists at Merrill Lynch estimate that the Saudi government budget requires $95 per barrel to break even this year and $85 per barrel next year.

"Adding the current uncertainty linked to the U.S. downgrade and the European debt crisis, we find that the global economy is standing on very frail pillars," said Blanch. "The loss in confidence could add a further drag on private consumption and investment and thus economic growth more generally."

Merrill Lynch said that a rally in gold prices to $2,000 an ounce won't necessarily be a straight line, especially if liquidity dries up with sovereign debt collateral suffering deep cuts in both America and Europe.