In the recent times, gold and crude oil has been soaring higher as a result of bargain hunting. The rollercoaster ride of the markets has the markets in a questionable mode as the markets seek out a path for it to tread on. Bargain hunting is the concept used by most writers to describe the increase in the markets after the markets have reached a rock-bottom. And it does seem logical in the long run.

The reliability of the financial news is questioned during times of chaos and uncertainty. Financial writers, like your’s truly, must find a ‘reason’ for the movement in the markets but those reasons are not consistent over the long term and are usually nothing better than random guesses. However, due to the limitation driven by a primal need to find the reason why something happened. So, we will surely continue to see the occurrences of such happenings in the future.

Bargain hunting implies that an asset is rendered worthless than it should be and is therefore undervalued. An investors’ ability to pick up an undervalued asset would be quite a talent but is there really such a thing as an undervalued asset?  The reason being - an asset’s price is a combination of an investors estimate for the future growth of the asset. It is logically only a matter of the opinion as to whether a particular asset is undervalued or not.

The prices of gold in particular had reached rock bottom in the preceding week. The fundamentals supported the notion for reaching such a level. But as we all understand, the markets are run by speculators who require to off-set their humongous short positions with buy. And when that particular phenomenon occurs, the prices seem to be rising thereafter.

In conclusion, bargain hunting is the name of the game in recent times and is responsible for the upsurge in the prices of commodities, including gold.