The Markets:

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

Oil rose throughout trade and ended with over 2% gains on short covering heading into next week’s holiday shortened trading sessions as strong Personal Spending data raised demand expectations.

The U.S. dollar index fell in early trade on worries over the credit market, but it ended well of its session low with just a slight loss as traders added carry trade positions and pushed the yen lower.

Treasuries fell on supposedly tame inflation data as the Dow, Nasdaq, and S&P rose markedly on strong earnings reports in high volume during quadruple witching day.

Among the big names making news in the market Friday were Merrill and Temasek, Circuit City, Marsh & McLennan, Philips, Walgreen, and Research in Motion.

The Commentary:

“February Gold finished up 12.2 at 815.4, 0.9 off the high and 8.6 up from the low.

March Silver closed up 0.148 at 14.488. This was 0.058 up from the low and 0.072 off the high.

The bull camp has to be happy with the price action on Friday, as the gold price gains were big enough that the trade seemed to be embracing something other than a minor corrective dip in the US Dollar. In fact, the gold market gains seemed to be correlated with the strength in the equity market, especially in the early afternoon when both gold and equities pulsed higher together. Apparently the stock market was seeing a pre-holiday euphoria burst and that optimism seemed to trickle over into a number of physical commodity markets. In the end seeing the US Fed indicate that they were planning to offer liquidity auctions twice a week until the liquidity pinch is relieved seemed to foster ideas in the Press and among traders that the sub-prime threat was being reduced and since gold has been periodically undermined by the fear of too much slowing, it isn't surprising to see gold benefit from the news on Friday.

Like the gold market, the silver market was cheered on by holiday cheer and perhaps as a result of ideas that the liquidity threat was being reduced by the promise of frequent liquidity auctions from the Fed. A stronger than expected US Personal Spending report apparently fostered ideas that the US consumer was not being bowed by the sub-prime crisis and that in turn lent physical buying interest to a host of physical commodity markets like silver. In fact, with the copper market posting a massive upward extension, the idea that physical demand for metals was potentially set to improve was not an isolated development.”- The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

Fed promises infinite money as long as banks want it

Liberty Dollar reopens to raise defense funds

Paul advances from asterisk to spoiler. Next, the nominee -- then president!

Credit crisis hits top U.S. bond insurer

The Statistics:

As of close of business: 12/20/2007

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

The Stocks:

International Royalty’s (ROY) new royalties, rumors about AngloGold’s (AU) hedge book, Silvermex’s (SMR.V) filed technical report, MAG Silver’s (MVG) joint venture with Penoles, Coeur’s completed acquisitions of Bolnisi and Palmarejo, and Orko’s (OK.V) year end summary and 2008 update were among the big stories in the gold and silver mining industry making headlines Friday.

WINNERS