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The Markets:

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

Oil continued to fall in early trade on ample supplies which are at higher levels compared to this time last year and are expected to build further in inventory reports tomorrow, but a short covering rally in late trade brought prices higher by the close.

The U.S. dollar index fell and treasuries rose on mostly poor economic data that pushed interest rates lower.

The Dow, Nasdaq, and S&P remained near unchanged on mixed earnings reports and poor economic data that raised concerns about consumer spending.

Among the big names making news in the market today were Hilton Hotels, Lowes, Martha Stewart, United Airlines, Visteon, Procter & Gamble, U.S. Steel, CB Richard Eliis and Trammell Crow, and Kodak.

The Commentary:

“Grandich Letter Special Alert:

GOLD – Ready to Shine Again

By Peter Grandich

October 31, 2006

11:00 a.m. EST

Outside of correctly stepping aside for a few major corrections, I’ve maintained a staunchly bullish stance towards gold since the spring of 2003. After seemingly everyone and their mother rushed into the bullish camp earlier this year, gold has been on the defensive and has led some to believe the bull market is over. While it’s not out of the woods yet, it appears ready to rock n’ roll again.

Strong physical demand, geopolitical problems here and abroad set to get worse, and a terminally ill U.S. Dollar are among the primary bullish factors for gold.  Throw in a belief that a party or parties have tried to suppress the gold price (but are failing), and we have all the makings for a big rally into the New Year.

I’ve spoken often about the $610 area being the all-clear level. What was once support became resistance after September 11th, but a bullish bottoming formation has formed since then. I believe we can see a powerful move up on a close above $610-$612. It appears a question of when, not if.

Quick note on Uranium –

Of all the metals, I’ve been the most bullish on uranium. I’ve often called it the no-brainer metal.  My target was originally $50 when it was under $20 and I raised it to $75 a few months back. We may need to raise it again and $100 could become a reasonable target. I believe this commentary on uranium is spot-on and says much of what I feel about uranium’s future.

http://www.financialsense.com/editorials/gue/2006/1030.html

Copper meanwhile, has formed a very bearish broadening top and appears only a question of when, not if, it falls sharply.   See http://futures.tradingcharts.com/chart/CP/W

I plan on doing an extensive update after the U.S. elections.” - Peter Grandich, Grandich Letter

“It was great to have gold break out the way it did early today. But the tedium of watching The Gold Cartel cap early surges is most tiresome. Gold made it up to that $611 mark not long after the Comex opening and that was all she wrote. It was setback time after that. Then, after sitting on gold up $8/$9 most of the trading session, The Gold Cartel bullion banks hit the close. Thus a day that could have been filled with excitement was replaced by one of disgust.

Tomorrow could be a very key one. We ought to come in lower. IF we do and then can close over today’s high, it ought to be off to the races time. However, we have to keep in mind the last time gold traded like this above $600, the bad guys came back with a vengeance and bombed us. Yet, my bet remains that we move "irregularly higher" into the elections. So far so good.” - From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com

“December Gold finished down 0.6 at 606.8, 2.5 off the high and 6.3 up from the low.

December Silver closed up 0.02 at 12.27. This was 0.29 up from the low and 0.04 off the high.

The bull camp was simply impressive in the action Tuesday and that marks the second session in a row where the influence of a sharp slide in oil prices was mostly ignored by the gold trade. While some might suggest that oil prices most fluctuated around unchanged, the fact that December crude oil at times reached the lowest level since June of 2005 could easily have resulted in concentrated selling action in the gold market. Apparently the gold market took the softer than expected US economic data as a sign of uncertainty or perhaps saw the data as a precursor to developing pattern of lower US Dollar pricing. With a number of bullish long term gold price forecasts recently suggesting that a weaker Dollar would be the basis for a sustained rally in gold, the action Tuesday is potentially viewed as a major inflection point. In fact, seeing the gold market slide down to the critical $600 level on the charts and then rebound sharply in the face of periodic extreme weakness in oil prices, grain prices and declines in the equity market, certainly seems to give off the impression of a flight to quality track.

Like the gold market, the silver market seemed to be poised to fail early in the session Tuesday and indeed fell right down to critical chart support of $12.00 before bouncing rather impressively into the afternoon action. As suggested in the gold commentary, the precious metals markets seemed to have further isolated their actions from the oil market and for the silver market to discount weakness in the equity market and periodic selling in copper, really seems to play down the physical commodity market connection. In short, it would seem that the currency market influence is attempting to assume the leadership role for the precious metals and given the flow of US economic readings recently, it now appears as if progressively weaker US Data will benefit, instead of hindering the silver market.” - The Hightower Report, Futures Analysis and Forecasting

GATA Posts:

UAE may make decisive shift away from dollar reserves

Ben Stein: Has corporate America no shame? Or no memory?

Interview with GATA Chairman Murphy available on free CD

The Statistics:

As of close of business: 10/30/2006

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: 0.62 tonnes were removed from the trust.

Silver Trust (SLV)

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

The Stocks:

NovaGold’s (NG) reiterated rejection recommendation of Barrick’s (ABX) increased bid, Metallica’s (MRB) reinstated explosives permit, Cambior’s (CBJ) struck and dismissed lawsuit, Freeport-McMoRan Copper & Gold’s (FCX) Board of Directors election and supplemental common stock dividend, Harmony’s (HMY) gold mining strategy, Richmont’s (RIC) Valentine Lake Gold project update, Randgold’s (GOLD) directorate change, Newmont’s (NEM) joint venture in Uzbekistan, earnings from Harmony (HMY), Northgate (NXG) and Buenaventura (BVN), Palmarejo’s (PJO.V) project update and drill results, and Esperanza’s (EPZ.V) and Silver Standard’s (SSRI) drill results were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

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

All of today's gold and silver stock news:

Wildcat Assay Results From Hardshell Property - More
- October 31, 2006 | Item | E-mail

NovaGold spurns sweeter Barrick offer as too low - "Last week, Barrick raised its hostile offer to $16 a share from $14.50 and called the all-cash deal, worth a total of $1.7 billion, its best and final offer. "No one was interested in just a bump," said NovaGold Chief Executive Rick Van Niewenhuyse. The offer expires on Nov. 7. Barrick, the world's biggest gold producer, requires 50.1 percent to win control of the company." More
- October 31, 2006 | Item | E-mail

Metallica Resources Announces Reinstatement of Explosives Permit for Cerro San Pedro