Gold Prices Decline as Market Reacts to U.S. Tariff and Employment Data

Spot gold experienced a sharp drop in early Asian trading on March 7, falling from a session high of $2,914 per ounce to an intraday low of $2,896.40 per ounce. Analysts attribute the decline to profit-taking ahead of the U.S. Non-Farm Payrolls report and rising U.S. Treasury yields, which reduced the appeal of the non-yielding metal.

Market sentiment was also influenced by the latest tariff-related announcements from the U.S. government. President Donald Trump’s administration withdrew its threat to impose 25% tariffs on Mexico and Canada, instead granting a one-month moratorium on trade covered under the U.S.-Mexico-Canada Agreement. As a result, Canada postponed the second phase of its retaliatory tariffs against the U.S. This shift in policy increased risk appetite, further pressuring gold prices.

Gold reached an all-time high of $2,956.15 per ounce on February 24 and has gained 11% year-to-date, driven by economic uncertainty and demand for safe-haven assets.

Technical Analysis

Analyst Christian Borjon Valencia notes that momentum indicators, such as the Relative Strength Index (RSI), suggest that bullish momentum has weakened but remains in positive territory. A daily close below $2,900 per ounce could put the uptrend at risk, with key support levels at $2,832 per ounce (February 28 low) and $2,800 per ounce.

On the resistance side, gold faces hurdles at $2,950 per ounce, followed by its record high of $2,954 per ounce. A breakout above this level could set the stage for a move toward $3,000 per ounce.

Additionally, Economies.com reports that a confirmed drop below $2,905 per ounce signals potential further declines, with stochastic indicators reinforcing a bearish outlook.