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

The Markets:

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

Oil fell slightly on expectations of a mild winter overall that would reduce demand for energy supplies.

The U.S. dollar index rose and treasuries fell on decent economic data as traders squared positions heading into the long holiday weekend.

The Dow, Nasdaq, and S&P fell in light volume as economic data did not make it more likely the fed will cut interest rates anytime soon.

Among the big names making news in the market Friday were Toyota, Walgreen, Ford, ImClone, McAfee, ETrade, and Research in Motion.

The Commentary:

“It is GATA’s contention that the gold price has been suppressed by surreptitious central bank gold hitting the market over the past decade. This gold is physical gold fed to various bullion banks, like Goldman Sachs, by certain central banks. It is an organized scheme, originated by the United States, and most likely, Robert Rubin. The manipulation of the gold price was the lynchpin of his "Strong Dollar Policy."

As a result of this scheme, it has been GATA’s contention that the central banks have less than half the gold they say they have. Instead of 32,000 tonnes of gold sitting in their vaults, they have less than 16,000 tonnes, meaning half the central bank gold is gone. Since there is a 1500 tonne annual deficit (demand over mine and scrap supply), this gold cannot be retrieved without sending the price to the moon. It also means The Gold Cartel must continue to fill this deficit, or the price has to rise sharply to ration demand. This is why gold has risen the past five years. The rise in the price assists in the rationing of the diminishing supply of available central bank gold. The major buyers of gold, such as the Indians, buy on weakness and back off on price strength.”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com

“February Gold finished up 0.7 at 622.3, 1.3 off the high and 1.3 up from the low.

March Silver closed up 0.145 at 12.635. This was 0.105 up from the low and 0.055 off the high.

All things considered the gold market held together rather impressively in the face of scheduled US data that firmed up the Dollar considerably. However, if the gold market was distinctly weakened by the strength of the Dollar, then it is possible that the trade was instead bolstered by the idea that the US economy was potentially poised to remain positively positioned for more growth ahead. Many traders suspect that the threat of terrorism was partially responsible for saving the gold market from the typical Dollar related pressure that normally is seen in the wake of an upside thrust in the Greenback.

While the silver market might have scored a moral victory by its action Friday in the face of Dollar strength, the market seems to have remained caught in a consolidation zone. Ongoing weakness in the copper market was probably countervailed somewhat by the much better than expected US durable goods readings. However, one can hardly become that upbeat toward physical demand in silver, with the general rise in silver exchange stocks that took place in December. It is possible that the silver market on Friday saw some support off the flight to quality theme and some traders want to play up the idea that the market more of less managed a pattern of higher lows for the week.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Ecuador's finance minister suggests defaulting on bonds

Diamond market is next target for derivatives

Even little Slovenia gets roped into the gold price-fixing scheme

China to spend $2 billion to rescue Zimbabwe

Government's power to debase currency is unlimited

Many GATA favorites to speak at Vancouver conference in January

James K. Galbraith: Paulson and Bernanke were clueless in China

The Statistics:

As of close of business: 12/21/2006

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

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

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: 279.04 tonnes were added to the trust.

The Stocks:

Kinross Gold’s (KGC) sweetened offer for Bema Gold (BGO), Centerra Gold’s (CG.TO) resumed mine operations, Gold Fields’ (GFI) acquired position in Western Areas, and Sabina’s (SBB.V) closed private placement with Silver Wheaton (SLW) were among the big stories in the gold and silver mining industry making headlines Friday.