Gold’s Safe Haven Shines June 3, 2019 Gold’s luster as a safe-haven asset grew as the weekend brought new warnings of how a trade war would affect the global economy. In early morning trading, Gold made double-digit gains and marked a nine-week high just shy of $1,320. Overnight European and Asian stock markets were down, while U.S. stock indexes are expected to open lower this morning. A recession could hit the U.S. in less than a year if President Donald Trump imposes more tariffs on China and if the Chinese retaliate, Morgan Stanley’s chief economist Chetan Ahya told Bloomberg. The recession could begin in as soon as nine months if the president follows through on a threat to impose 25% tariffs on an additional $300 billion of Chinese imports and if China retaliates with its own set of countermeasures. Scotiabank commodity strategist Nicky Shiels wrote last week that a bigger move in gold is coming when the market “internalizes” a “no trade deal” scenario, which will subsequently affect the outlooks for global growth and inflation. Pres. Trump on Friday also threatened new tariffs on Mexico until it restrains the flow of migrants across the U.S.’s southern border. The move rattled financial markets and sparked recession fears, sending more investors to the yellow metal. Gold futures increased 5.8% in May to end the month at $1,311.10 on Comex. Silver futures fell 2.7% for the month, and spot palladium slid 4.4%. Spot platinum, which is sensitive to the growth of the Chinese automotive industry, dropped 11% in May and touched its lowest level since February last week. Chinese manufacturing activity expanded for a third straight month in May, with orders increasing at a faster rate than in April, according to a Caixin survey on Monday. The private Caixin/Markit factory Purchasing Managers’ Index came in slightly better than expected in May, at 50.2 – the same level as in April. Analysts polled by Reuters had expected it to come in at 50. Readings above 50 indicate expansion, while those below signal contraction. But the Caixin survey also showed that manufacturers’ confidence fell to the lowest level since 2012 as trade tensions with the U.S. escalated. The monthly data on U.S. manufacturing are expected later Monday morning. Disclaimer: This editorial has been prepared by Dillon Gage Metals analysts for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.