GOLD AND SILVER HAMMERED DESPITE DELUGE OF POOR DATA

Despite the poor productivity and retail sales report, gold and silver were hammered at the end of the European close. News came out from King World News that it was the BIS (Bank of International Settlement) which bailed out a heavy short position by a major financial institution which increased their short positions shortly after the "awesome" jobs report on Friday,

But the short position soon turned into a nightmare as gold spiked after the productivity report and spiked again after the retails sales report. We can assume it was an attempt to bail out a troubled financial institution.

Looking back we had a similar action in April where a financial institution(s) dumped more than US$2.0B worth of paper gold. The interesting twist is that this time it required US$5.0B to effect a similar downward movement in price.

If anything, it showed that the central bankers are getting more and more desperate in their attempt to suppress the price of gold and silver.

Zerohedge had two very interesting reports. The first report concerns the income tax receipts which fell from a 13.4% y-o-y growth in June 2013 to 1.2% growth y-o-y in June 2016 (see chart by Zerohedge).

    






As can be seen, the chart is showing a very precarious trend. If the trend continues into negative territory - and that is a strong possibility given the continual weak earnings and growth in minimum wage jobs  - we could likely see a recession in the coming months.

The other is a report where Turkey's President threatened to abandon the US$ on its trade with Russia. The lean towards Russia by Turkey could result in a major black swan event.

Meanwhile, I continue to be bullish on precious metals, miners and related ETFs.