Jeffrey Gundlach speaking at the 2019 SOHN Conference in New York on May 6th, 2019.

DoubleLine CEO Jeffrey Gundlach is betting on gold.

"I am certainly long gold," Gundlach said in an investor webcast Thursday. He added his trade is based on the expectation that the dollar will finish the year lower.

When the dollar weakens, gold tends to appreciate as it becomes cheaper for investors holding other currencies.

Gold prices hit a three-month high this month as investors flee to the safe-haven bullion amid escalated trade tensions. Meanwhile the dollar fell to a 11-week low on Wednesday as the market increasingly bet on a rate cut in the coming months.

The so-called bond king noted that 2019 has been "the opposite of 2018" because gold, bitcoin, stocks and bonds are all making money.

Despite the trade war, the S&P 500 is still up more than 15% this year, while the 10-year Treasury yield dropped this month to its lowest level since 2017. The benchmark yield also dipped below the yield on the 3-month note, inverting part of the so-called yield curve. Yield-curve inversion has been a reliable recession signal closely watched by experts and the Federal Reserve.

Gundlach now sees a 40% to 45% chance of a recession within six months, and a 65% chance in the next year. He pointed to several indicators that are flashing red lights, including the spread between consumer confidence expectations and current conditions, which is near all-time lows.

The money manager also sounded an alarm on the "soaring" U.S. deficit, which could get "much, much worse in the next recession." He noted that despite the low rates, U.S. debt interest as a percentage of GDP is expected to hit a record.

Gundlach, a respected markets forecaster, oversees $130 billion of assets under management at DoubleLine, according to its website.

A trade call he made in May to take advantage of bond market volatility has returned more than 20%.