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

The Markets:

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

Oil rose on supply concerns after a week where OPEC announced more output cuts while inventories in the U.S. fell.

The U.S. dollar index rose despite tame CPI as Net Foreign Purchases came in higher than expected at $82.3 billion and easily covered October’s trade deficit of $58.9 billion.

Treasuries initially gained markedly as CPI came in lower than expected and took pressure off of the fed to raise interest rates, but all gains were erased by the end of trade and bonds ended slightly lower as traders took profits heading into the weekend.

The Dow, Nasdaq, and S&P rose on tame inflation data that renewed hopes the fed may cut interest rates next year.  The Dow closed at a new all-time high and the S&P closed at a new 6 year high.

Among the big names making news in the market Friday were Apple, CBS, Ford, and Black & Decker.

The Commentary:

“As most of you know, GATA put out a press release this morning on the Blanchard study, "Gold Market Lending," which can be found in PDF format at Blanchard's Internet site:

http://www.blanchardonline.com/pdfs/Gold_Market_Lending.pdf

It is a superb effort by Neal Ryan and quintessential to GATA’s findings over the years. The gold lending/swap issue is the key to GATA’s gold price manipulation case … in that the central banks have been surreptitiously flooding the market with their gold reserves in order to keep the price artificially low. It is our contention that so much of this gold has hit the market over the last decade that the central banks have less than half the gold they say they do in their vaults. It will be fascinating to see how the IMF responds to Blanchard, if they do at all.

The timing of this coincidental report could not be better from GATA’s standpoint, as we are going to press for a comprehensive audit of US gold reserves next year. Maybe we can really get some "mo" going on this one. One thing I am sure of. When, and if, the investing world learns that the central banks have gone through so much gold, the price will begin to go ballistic … thus we must press on.”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com

“February Gold finished down 11.8 at 619.1, 14.1 off the high and 0.7 up from the low.

March Silver closed down 0.97 at 12.98. This was 0.02 up from the low and 0.98 off the high.

With a big range down failure the gold market on Friday registered its displeasure with both the fundamental and technical condition. With the US registering what some might call an "all-clear" on the inflation front and the US economic readings mostly slack, the sellers were provided with the majority of the news flow. In fact, even though the gold market wasn't recently being supported by flight to quality or diversification concerns, the market had to be disappointed by the news that the US Treasury saw a moderate jump up in the inflow of foreign capital. In other words, the idea that money was fleeing the US to diversify into other currencies was dealt a blow with the TIPS report. As mentioned in the mid day coverage such stellar gains in the equity market probably also served to knock down the interest in gold. Some traders pointed to extremely critical technical levels of $620.8 and $610.5 as points that could accelerate year end profit taking by the funds, as failing to hold those levels might produce a number of classical sell signals.

With the gold market coming under aggressive selling pressure the silver market just wasn't able to track its own course. With the Dollar higher, US economic numbers soft and US copper prices forging a new low for the move, the silver market was presented with a number of negative outside market developments. Some players expressed concern that a decline below the early November high of $13.35 in the March contract might spark pre-mature year-end or month end selling.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

MineWeb covers Blanchard report on need to disclose central bank gold lending

Don't resent coin melting ban; it's a great victory for gold and silver

The Statistics:

As of close of business: 12/14/2006

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

COMEX Gold Trust (IAU)

Note: Change in Total Tonnes from yesterday’s data: 0.78 tonnes were added to the trust.

Silver Trust (SLV)