Market Analysis from GoldSeek.com, SilverSeek.com & CapitalUpdates.com:

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The faster than expected advanced figure for 3^rd quarter growth was economically encouraging, but the stronger than expected Chain Deflator raised some inflation fears.  Those inflation fears eased, however, as the Personal Consumption Expenditure (PCE) Index rose 3.7% and the Core PCE Index rose just 1.3%.  The Core number that is closely watched by the fed was considered to be pretty tame. 

Michigan Sentiment disappointed, but it was largely overshadowed by the GDP figures and also by political issues at the capitol.  “Scooter” Libby, Vice President Cheney’s now former Chief of Staff, was indicted on 5 charges relating to the blown cover of a CIA Officer, but those charges were largely expected and most were glad to see that there was no mention of Rove or Cheney in the indictments handed down today.

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This week’s economic reports:

Next week’s economic highlights include Personal Income and Spending on Monday, the ISM Index and FOMC policy announcement on Tuesday, Productivity and ISM Services on Thursday, and October jobs data on Friday.

COT Gold Report - October 28, 2005

COT Silver Report - October 28, 2005

Gold traded mixed and near unchanged in Asia before falling a bit in London, but it then dropped further at the New York open and remained near its lows for the rest of morning trade until it rebounded in the afternoon heading into the close to cut its losses and end near where it started that morning with a small loss.  Gold still remains just $3.60 from the 17 and ¾ year closing high of $476.40 made on October 11^th.  Silver followed a similar pattern to also close with a small loss, but remain just 4 cents from the 10 month closing high of $7.81 made on October 17^th.

Gold and silver equities spent the morning mostly slightly lower before rising in afternoon trade and ending with small gains.

More Precious Metals Analysis:

“The precious metals markets started out under light pressure Friday and then added to those declines before a light recovery into mid session. We suspect that the stronger than expected GDP reading initially undermined gold because that report firmed the Dollar. However, in the long run seeing strong growth in the US is an important function of the bull market as that should facilitate physical demand and increase the prospects for inflation. We also suspect that Gold and silver bulls were somewhat disappointed by the muted inflation readings from the Employment cost Index report and because of the weakness in oil prices.” - The Hightower Report, Futures Analysis and Forecasting

More from this weekend’s issue of The Gold Forecaster by Julian Philips and Peter Spina:

South African Gold Price - Technical Commentary:   

The Rand gold price rallied strongly this past week, testing the 3,250 resistance for the first time since early 2003!  We have thus reached our first upside target and should the dollar gold price remain strong and rally more here, we could see 3,500 before consolidation.  Thus, in this zone marked on the chart (3,250 – 3,500) we should short-term peak. These multi-year record levels are very bullish for SA producers, who were several months ago dealing with multi-year lows on the rand gold price.

Support now exists around 3,000-3,100, then again around 2,750.  With global gold prices breaking out to new levels, the Rand gold price is just “joining the party.”

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The U.S. dollar index gained throughout trade Friday on economically pleasing GDP figures and politically pleasing “limited” indictments.  The euro fell from 4 week highs.

Oil traded mixed and near unchanged in a tight range as traders debated future demand, winter weather, and the level of supplies.

Treasuries found minor gains in early morning trade as the inflation-adjusted basis Employment Cost Index fell 2.3% on a year over year basis, the largest drop on record.  Treasuries then fell off, however, as the yield on the 10 year rose back near 7 month highs on other economic data released today that reinforced the view of further fed interest rate increases.  Treasuries did rally into the close, though, to end with a small gain.

The Dow, Nasdaq, and S&P started off higher on the positive GDP report and continued higher for the rest of trade as political fears eased.  After gaining over 1.5% on Monday and then losing over 1% on Thursday, all three indices gained over 1% on Friday to end the week higher.

Among the big names making news in the market Friday were Berkshire Hathaway, Delta, GM, Chevron, Bristol-Myers, Avon, Constellation Energy, Archer Daniels, Deutsche Bank, SBC and AT&T, Verizon and MCI, Matsushita, and Toshiba.

Gold & Silver Stock News Update from GoldReview.com:

Yamana’s gold output in Brazil, Kinross Gold’s update on late financial statement filings, IMAGOLD’s indicated resources at Quimsacocha, and earnings from Eldorado Gold were among the big stories in the gold and silver mining industry making headlines Friday.

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Winners & Losers tracks NYSE and AMEX listed stocks that trade over $1.

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