Timberline Resources Corp. [OTC-BB: TBLC] Upside Through Discovery • Record Revenues - Drilling Services

The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil rose for most of trade on worries over violence in Nigeria and more talk about another OPEC cut, but it fell off by the close and ended nearly 1% lower on warm weather forecasts and uncertainty about OPEC’s meeting next week.

The U.S. dollar index initially rose after the jobs report before it fell back off as traders looked into the report and saw a sharp drop in construction jobs and Michigan Sentiment came in lower than expected, but it then rose after a CNBC interview with treasury secretary Paulson a little after 11:30AM EST.  Paulson spoke about a strong economy and said China needs more foreign exchange flexibility.  Although more foreign exchange flexibility means a stronger yuan, traders somehow interpreted that as bullish for the dollar.  Perhaps talk about a strong economy reignited some hopes for an interest rate increase, rather than a cut, next year.

Treasuries fell after the jobs report came in mostly strong, especially in the service sector.

The Dow, Nasdaq, and S&P rose on an overall stronger than expected jobs report that reduced concerns the economy is slowing too quickly.

Among the big names making news in the market Friday were Citigroup, Bank of America and Barclays, and McDonald’s.

The Commentary:

“The assault on gold has been relentless this past week. It fell to $624.60 before recovering smartly on the close to finish higher. Why the orchestrated recent takedown?

*Could be because of the dire nature of the Baker/Hamilton report on Iraq.

*Could have something to do with the coming Bernanke/Paulson trip to China.

There is talk circulating in the smart money circles that China is going to insist the US raise interest rates to defend the dollar. If we don’t, word is, they are going to pull out of the dollar to a substantial degree.

If this talk is even close to the mark, the US is in big trouble, either way. The dollar goes or our financial/real estate markets go.”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com

“Whipsaw price action in the US Dollar created a very volatile day in the gold market as currency movements seem to be the biggest influence of the precious metals markets recently. Gold was initially pushed down early in Friday's session as a better than expected Nov payroll number rallied the Dollar. But the Dollar soon sold off and gold rebounded on a soft U of M mid-December sentiment reading. By mid session however, Dollar friendly comments by the US Treasury Secretary and his somewhat negative comments on the Chinese Yuan reversed the Dollar's direction to the upside once again with a tremendous wave of Dollar buying and Yen selling that put pressure on the gold market for the balance of the session. Other supportive news for gold had little influence on today's trade, but included a major brokerage firm touting the bullish supply/demand fundamentals for gold and lifting their 2007 though 2010 price projections. Also, the chief finance officer at South African's Gold Fields Ltd said he did not expect to see the big hedge position at the recently acquired South Deep mine to exist for a long period.

The silver market followed gold's lead as a gyrating Dollar created yo-yo price action. With the Dollar seeing a surge in short covering buying, March silver ended the day in negative territory. The Nov payroll data did show declines in construction and factory jobs and as an industrial metal the softness in these sectors is somewhat disappointing. While silver did not see the type of aggressive buying that developed during Thursday's action as prices dipped, rising speculative fund buying in silver through exchange traded silver funds is a source of support that could limit a technical pull back in the market. A more volatile trade is likely to be seen as volume begins to thin as the end of the year approaches.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Leading Asian economist urges joint action on dollar

In glitter and glory, the Rock of All Ages

Gold is magnificent at the museum but it is no museum piece

Asian Development Bank official urges management of dollar's fall

IMF said ready to propose proper accounting for central bank gold

The Statistics:

As of close of business: 12/07/2006

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

 Note: Change in Total Tonnes from yesterday’s data:  The NYSE subtracted 0.16 tonnes and the ASX added 0.05 tonnes.

COMEX Gold Trust (IAU)

 Note: No change in Total Tonnes from yesterday’s data.

Silver Trust (SLV)

 Note: Change in Total Tonnes from yesterday’s data: 31 tonnes were added to the trust.

The Stocks:

Gold Fields’ (GFI) offer for Western Area’s (WARJ.J), Kimber’s (KBX) newsletter, Newmont’s (NEM) selling of their stake in an Indonesian mine, and Avino’s (ASM.V) corporate update were among the big stories in the gold and silver mining industry making headlines Friday.

WINNERS