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             Gulf Resources Announces Asset Purchase Agreement with
                           Shouguang City Houxing Area

Expected to initially add approximately 3,900 metric tons of incremental annual
   bromine production bringing the Company's total annual production output to
                                   26,700 tons

LOS ANGELES and SHENZHEN, China, October 31, 2007 /Xinhua-PRNewswire/ -- Gulf
Resources, Inc. (the "Company") (OTC Bulletin Board: GUFR - News) a leading
producer of Bromine and crude salt in China through its wholly-owned subsidiary
Shuoguang City Haoyuan Chemical Company Limited (SCHC), announced today it
signed a definitive agreement to acquire substantially all of the assets of
Shouguang City Houxing Area, a bromine producer located in close proximity to
SCHC for approximately $6.7 million in total consideration.

The assets include a 50-year mineral rights and land lease covering 2,310 acres
through Dctober, 2054, which has been paid in the full. The property has 210,000
to 270,000 metric tons of proven bromine reserves. Additional assets to be
conveyed with the purchase include the related production facility, wells,
pipelines and other production equipment, in addition to the current buildings
and other assets on the property. The Company executed an asset purchase
agreement with Mr. Xingji Liu, the sole owner on October 26, 2007.

The facility is currently operating at 67 percent of capacity utilization and
produces approximately 3,900 metric tons of bromine annually through 432 wells,
which equates to $7.2 million in revenues and $1.9 million in net income at
current market prices. Gulf Resources anticipates making $3.1 million in total
capital expenditures, which will take approximately three months to complete
from the time of commencement, and is expected to increase capacity utilization
to 85 percent while increasing overall bromine production output to 4,900 metric
tons annually. In addition, the Company estimates the property will yield
approximately 30,000 metric tons of annual crude salt production, equating to
$0.39 million in incremental revenue.

"The acquisition of Shouguang City Houxing Area is further evidence of our
ability to execute and complete asset purchases at very attractive valuations,"
stated Ming Yang, CEO, Gulf Resources, Inc. With the latest two purchases, the
Company is on track to produce approximately 26,700 metric tons of bromine
during the coming twelve moths, a 40 percent increase from previous levels, with
further room for improvements once upgrades are completed. Additionally, the
Company now controls approximately 1.7 million metric tons of proven reserves, a
significant asset that will enable us to produce profitable operating results
well into the future."

The asset purchase is subject to various conditions, including applicable
regulatory approvals. Further details on the terms of this transaction can be
found in the Company's 8-K which will be filed with the Securities and Exchange
Commission.

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Gulf Resources, Inc.

Gulf Resources, Inc, operates through two wholly-owned subsidiaries: SCHC which
is engaged in manufacturing and trading Bromine and Crude Salt in China. Bromine
is used to manufacture a wide variety of bromine compounds used in industry and
agriculture, and SYCI which manufactures and sells chemical products utilized in
oil & gas field explorations and as papermaking chemical agents. For more
information, please visit http://www.gulfresourcesco.com.

Safe Harbor Statement:

Certain statements in this news release may contain forward-looking information
about Gulf Resources and its subsidiaries business and products within the
meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the
Securities Exchange Act of 1934, and are subject to the safe harbor created by
those rules. The actual results may differ materially depending on a number of
risk factors including, but not limited to, the following: the ability of Gulf
to complete the asset purchase of Shouguang City Houxing Area, the general
economic and business conditions in the PRC, product development and production
capabilities, shipments to end customers, market acceptance of new and existing
products, additional competition from existing and new competitors for bromine
and crude salt, changes in technology, and various other factors beyond its
control. All forward-looking statements are expressly qualified in their
entirety by this Cautionary Statement and the risks factors detailed in the
Company's reports filed with the Securities and Exchange Commission. Gulf
Resources undertakes no duty to revise or update any forward-looking statements
to reflect events or circumstances after the date of this release.

Investor Relations Contact:
Ethan Chuang (714) 858-1147
Ethan@gulfresourcesco.com

Matthew Hayden
HC International, Inc.
(858) 704-5065
Matt.hayden@hcinternatioal.net

Source: Gulf Resources, Inc.
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