Gold saw its first losing week of the New Year last week, as stocks saw further buying on strong appetite for risk and yields rose. Whether or not this is simply the gold market taking a breather before more upside remains to be seen.

Although much of the recent economic data has pointed to further strength in the economy, Friday’s Q4 GDP data was a disappointment. Consensus estimates were looking for fourth quarter GDP to come in at 2.2 percent. The actual reading, however, came in at only 1.9 percent. Trade deficits were cited as a significant drag for the quarter, although the report did contain some positives as well. Personal consumption expenditures, for example, rose at a 2.5 percent pace.

Some analysts believed that the Q4 GDP reading could potentially influence the Fed with regards to its rate hike plans. Although that is a possibility, the miss on GDP was likely not significant enough to deter the central bank from its rate hike plans this year. In fact, the Fed will likely want to see a lot more data before taking action.

The Fed will be meeting this week, and the markets are not expecting any surprises. Chances for a rate hike are extremely low, and even the chances for a March rate hike are very low looking at current Fed Funds futures contracts. For the time being, June appears to be the most likely date for the next hike from the central bank.

Of course, a lot can change between now and then.

The Donald Trump administration has begun following through on some of its campaign promises, and the President has been busy signing executive orders. The executive order signed on immigration is already the subject of much debate, so much so that other world leaders are voicing their opinions.

Trump has signed an executive order banning entrance to the United States from several primarily Muslim countries, and over the weekend numerous people-including legitimate green card holders-were detained at U.S. airports. Others were prevented from getting on U.S.-bound flights.

The action has sparked both praise and utter outrage, and many domestic and world leaders are voicing significant concerns not only about the ban on entrance for people from these counties but also the 120 day suspension of the U.S. refugee program.

There have been numerous protests over the weekend, and unfortunately, this subject will likely remain a fierce topic of debate for some time to come.

It is not clear how markets will react this week, although the divisive nature of the order and very different reactions from people could potentially fuel risk aversion.

The gold market will be paying attention, and investor anxiety could fuel buying in the yellow metal which is viewed as a safe haven asset. The gold market will also likely take its cues this week from interest rates, the dollar index and equity markets. Rising yields could potentially weigh on the yellow metal, although if risk aversion does start to set in, yields could see a decline along with stock prices.

Either way, given the amount of uncertainty being seen surrounding the immigration ban, gold prices are not likely to fall too far even if stocks look strong again this week. 

The gold market has been showing some signs of life in recent trade, and the possibility of a bottom being put in appears to be on the rise. That being said, however, the gold market remains vulnerable to additional selling pressure. Further dollar strength, rising rates and robust appetite for risk may all potentially weigh on the yellow metal for the foreseeable future.

The countdown is on, and President-elect Donald Trump will be taking office in less than two weeks. Markets have shown a significant reaction to the Trump victory, but the real test will be seen in the coming weeks and months.

Equity markets have risen sharply on the notion of lower taxes and significant fiscal spending. Interest rates and the dollar have also been on the rise, as Trump’s policies are seen as being inflationary.

What remains unclear, however, is exactly what the incoming Trump administration will and will not be able to accomplish. Even in the most recent FOMC meeting minutes released last week, the Federal Reserve seemed more hawkish yet also made it pretty clear that there are a lot of unknowns that could potentially affect monetary policy. They did not, however, mention Trump by name.

Investors will want to see rapid progress being made on Trump’s policies, and any signs of congressional gridlock or a smaller fiscal spending package than is currently expected by markets could potentially halt the current rally in its tracks.

Even with a large boost in fiscal spending, some analysts are questioning just how much of an effect it may have on overall economic output. In the Fed’s most recent projections, the central bank is now forecasting GDP growth of 2.1 percent versus its September forecast of 2 percent.

Although the central bank said that those projections are subject to change, for now it appears that the central bank is more concerned with upside risks. Some analysts felt the Fed minutes were the most hawkish in years, but it is important to keep in mind that with many potentially significant changes on the horizon the path of monetary policy could be a rocky one. After all, it was not long ago that four rate hikes were expected in 2016, yet the central bank only saw fit to raise rates once.

The gold market could potentially be in the midst of a long-term bottoming process, and it’s possible that a bottom has already been reached.

With the new incoming administration comes potential changes in both economic and geopolitical policy, and gold could possibly provide investors with a degree of comfort. There are a number of issues that have the potential to rattle markets and drive a flight to safety including a possible trade war, negotiations with Mexico over a border wall and U.S./Russian relations.

Although risk assets may remain in favor for the time being, investors will be watching both the data stream and any changes in policy closely. With the current bull market in stocks already very aged, there exists the possibility of a significant asset reallocation that could potentially send gold on its way higher in a multi-year bull market.