Gold bar supply is tightening in Hong Kong and Singapore

The Wall Street Journal noted that Credit Agricole analyst Robin Bhar wrote in a note to clients that resurgent Asian physical demand is helping to support the gold market. ”Intraday price volatility has subsided sharply, a major factor in giving the bulls enough confidence to re-enter the market against a background of very active physical buying,” Bhar noted.

He later added that gold bar supply is tightening in Hong Kong and Singapore, while premiums are now at their highest level since February of this year.

The gold price surged higher Monday, rising $39.00 to $1,677 per ounce. Weakness in the U.S. dollar, spurred by healthier risk appetites amongst investors, propelled the price of gold. The euro rose against the greenback following a pledge this past weekend from French and German leaders to do whatever is necessary to prevent a banking crisis. S&P 500 stock futures climbed 15.40 to 1170.30, which crude oil rose 2.2% to $84.80 per barrel.