On Friday (March 7), spot gold suddenly fell sharply in the short term, with the price of gold falling sharply from the high point of the period near $2,914/ounce, just touching $2,896.40/ounce, setting a low point for the day.
Gold stopped its gains in the previous few trading days as investors took profits before the release of the key US non-farm payrolls report. Rising US Treasury yields also reduced the attractiveness of holding this non-yielding metal.
Analysts also pointed out that the latest tariff news from US President Trump has triggered a rise in risk appetite, hitting gold with its safe-haven properties. Trump's administration further withdrew its threat to impose a 25% tariff on Mexico and Canada, a major concession to Trump's radical trade agenda.
Trump signed an executive order on Thursday (March 6) local time, announcing that all goods that meet the rules of the 2020 free trade agreement between the United States and the two neighbors will receive a one-month tariff reprieve, which is Trump's second policy change in two days. Trump's executive order on Thursday allows the tariffs to be suspended until April 2.
Canada postponed plans to implement second-phase retaliatory tariffs on the United States after US President Trump temporarily gave a break from trade covered by the US-Mexico-Canada Agreement.
Concerns about Trump's tariff measures have pushed safe-haven gold prices to 11 record highs this year, peaking at $2,956.15 an ounce on February 24, and up 11% so far this year.
Gold traders will closely watch the February non-farm payrolls data released on Friday, with analysts expecting an increase of 160,000 jobs.
As depicted by the Relative Strength Index (RSI), momentum indicates that buyers have lost some momentum, but the RSI remains in bullish territory.
A daily close below $2,900/oz would put the uptrend at risk and open the door for a healthy correction in gold. The first support for gold would be the February 28 low of $2,832/oz, followed by $2,800/oz.
The next resistance for gold would be $2,950/oz, followed by the all-time high of $2,954/oz. A break above the latter would target the $3,000/oz mark.
Moreover, with gold confirming a break below $2,905.00/oz, it suggests that gold will fall further in the coming sessions, especially with the negative signal from the stochastic indicator.
