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With gold trading below the $1200 level and silver approaching $16 per ounce, this could potentially prove to be a significant buying opportunity for the long-term investor.

Could gold and silver go even lower? Sure-anything is possible. It would seem to us, however, that the recent price action in these precious metals has been overdone (which might be said of many key markets since the surprising Trump Presidential victory) and that at some point markets may find more of an equilibrium. That being said, however, we believe that lower prices should be welcomed by investors with open arms.

For the time being, optimism over Trump’s plans has fueled stronger equity markets and a stronger dollar while driving down interest rates and demand for perceived safe haven assets such as gold and silver. Whether or not the recent rally is truly sustainable is another question entirely, and some analysts are now calling for a pullback in stocks.

It would not be surprising, however, to see this rally in risk assets continue into the New Year. Donald Trump does not take office until Friday, January 20th-nearly two months from now. While talk of his plans and economic agenda has spurred equity buying and a stronger dollar, right now that’s all it is-talk. Once Mr. Trump takes office, time will tell if he is able to implement many of his plans. While Trump has spoken of a broad tax cut and increased fiscal spending, it remains unclear exactly how he plans to accomplish this.

The recent events in India may also play a key role in gold’s near-term fortunes. India recently banned both the 500 and 1000 rupee notes in an effort to crackdown on black money, and now there is discussion of a gold import ban in the country. According to some reports, India imports about 700 tons of gold each year-a massive quantity. If there is in fact a ban put on imports, the gold market could potentially see quite a shock, in fact, some are already comparing such a move to Nixon taking the dollar off of the gold standard.

Of course, whether or not such a move materializes remains to be seen, but you certainly have to consider the possibility that a potential Indian gold import ban may be one of the forces behind the recent selling in gold.

With a possible Santa Clause rally being seen in stocks over the next several weeks, gold and silver may remain on the defensive for the remainder of the year. That being said, however, these metals may be getting close to finding a bottom, and it would not be surprising to see that bottom coinciding with the Fed lifting rates next month. Fed Funds futures are now pricing in a 100 percent chance of a rate hike by the central bank at its next meeting. The next hike could potentially become a case of sell the rumor buy the fact for gold and silver.