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Both the gold and silver markets limped to the finish line to end a tumultuous year. With gold currently trading at just over $1150 per ounce and silver trading for less than $16 per ounce, investors are likely wondering if things may get even worse before they get better.

Gold and silver have been under pressure since the election of Donald Trump back in November, and the “Trump” rally in risk assets has been in full swing for the last several weeks now.

This rally has seen stocks carve out new all-time highs, while the dollar index is trading at levels not seen in years. Treasuries have sold off sharply as interest rates have been on the rise, and overall appetite for risk has been strong.

The question is: Will it last?

It is important to keep in mind that markets are driven by two key emotions: fear and greed. Currently, greed is in control as investors chase higher returns in equities and risk assets, boosting their prices in the process.

The notion of lower taxes, less regulation and increased fiscal spending has been the catalyst for rising optimism over the economic outlook in the coming years. Although all of these things sound great on paper, it remains very unclear what may or may not actually be implemented when push comes to shove. It also remains unclear just how much of an effect such plans may have on overall economic output and whether or not those effects will prove to be sustainable.

You could make the argument that markets have perhaps gotten ahead of themselves-very far ahead.

And what if many of the current economic policies being discussed now are unable to be put into action? Then what?

What if geopolitical tensions rise under a Trump administration?

Any way you slice it, there appears to be a considerable amount of unknowns entering the New Year that have the potential to cause investors to shift from “greed” mode to “fear” mode. Needless to say, such a shift in investor sentiment could have a significant impact on the price of gold, silver and other perceived safe haven assets.

The first quarter of this New Year could be very interesting. Donald Trump will take office on January 20th, and investors will be expecting quick progress on many of the key issues that he ran on.

Investors will be looking to see economic plans and policies put into action, and any signs of a failure to deliver on key economic issues could potentially send markets into a tailspin.

Investors will also continue to monitor the data stream looking for further signs of economic strength. The Fed recently added a third interest rate hike to its dot-plot forecast for 2017, and although the central bank sounded considerably more hawkish following its recent meeting, it is important to also keep in mind that 2016 was at one time supposed to see four interest rate hikes yet only saw one.

The current economic expansion is already one of the longest on record since the Second World War, and many significant challenges still remain.

Although gold and silver could remain on the defensive for the first part of this year, these precious metals may very well find a long-term bottom in the first few months of the New Year.

Gold could see sub-$1100 per ounce prices before finding more solid ground, and we suspect that any further dips in the price of the yellow metal are likely be bought aggressively.

Significant change and significant opportunity will be seen in the New Year. 2017 could be a pivotal year for the gold and silver markets, and could mark the beginning of an extended bull market that could take prices significantly higher from current levels.