Precious metals have been tossing and turning while the market mood keeps shifting these days.

What’s next for silver as it gears up to test this former support zone?

Silver (XAG/USD) Daily Chart by TradingView

Risk-off flows from early last week kept silver below the support zone at $30.000, potentially turning this area into a resistance level next.

The Fibonacci retracement tool on the latest downswing on the daily chart reveals that this lines up with the 50% level, as well as the pivot point ($29.096). Looking further back shows that this area previously held as resistance back in April.

Will it hold as a ceiling again this time?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on silver and market sentiment, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

The 100 SMA is above the 200 SMA to hint that upside momentum is still present, and the gap between the moving averages is widening to reflect strengthening bullish vibes. Stay on the lookout for a move past the 61.8% Fib, as this could mean that silver bulls are ready to keep charging until the resistance at R1 ($31.404) near the yearly highs.

On the other hand, if the area of interest holds as resistance, watch out for a potential drop back to the swing low near S1 ($26.957) or even until the next floor at S2 ($24.909).

Just be sure to keep close tabs on market headlines that could impact overall risk sentiment when trading commodities!