On Friday (March 7th) during the Asian session, spot gold fluctuated narrowly and is currently trading around $2911.41 per ounce. Gold prices fell slightly on Thursday due to some of Trump's tariff exemptions and market expectations that the Russia Ukraine war was coming to an end, which cooled down risk aversion and drove some bulls to take profits. Spot gold fell to around $2891 per ounce at one point, but the US trade deficit in January hit a record high, suggesting that trade may drag down economic growth in the first quarter. Market expectations for the Federal Reserve's May interest rate cut have heated up, attracting bargain hunters to support gold prices. Spot gold closed at $2910.76 per ounce on Thursday, a decline of about 0.28%.

At present, market attention is shifting towards Friday's non farm payroll data to further understand the Federal Reserve's monetary policy movements.

We are only seeing some slight profit taking pressure from the recent uptrend, and the fundamentals are still bullish... "said Jim Wyckoff, senior market analyst at Kitco Metals." Another factor that is putting slight pressure on the gold market is the rise in bond yields

The yield of 10-year US treasury bond bonds hit a new high for more than a week on Thursday, reducing the appeal of non yield gold. Investors are carefully studying the latest data, searching for signs of economic cracks, while trying to navigate the cross effects of the Trump administration's constantly changing tariff details.

According to data from the US Department of Labor, the number of initial jobless claims decreased by 21000 last week, seasonally adjusted to 221000, lower than the expected 235000 by economists surveyed by Reuters.

In contrast, Challenger, a global career introduction company, Gray&Christmas said earlier in the day that the number of planned layoffs jumped 245% last month to 172017, the highest level since the economy was in the worst period of the COVID-19 pandemic in July 2020, and the highest level since the global financial crisis 16 years ago in February.

The uncertainty surrounding the impact of US President Trump's tariff measures and billionaire Elon Musk's efforts to reduce the size of the federal government on the labor market has increased concerns about slowing economic growth and has pushed yields lower in recent weeks.

We have seen a significant steepening of the US yield curve, "said Tom di Galoma, Managing Director of Mischler Financial." The curve should eventually become flatter, but the current situation is that tariffs and the long-term budget prospects for many economies are very uncertain

After the Trump administration announced that the recently announced temporary tariff exemptions for car manufacturers would include all products covered by the USMCA, yields rose. The yield on 10-year US Treasury bonds rose to 4.2346% on Thursday, but gave up the gains in late trading and closed at 4.280%, a decrease of about 0.47%.

As companies import ahead of schedule before tariffs take effect, the US trade deficit hit a record high in January, suggesting that trade may drag down economic growth in the first quarter.

The Bureau of Economic Analysis (BEA) of the US Department of Commerce announced on Thursday that the trade deficit in January surged 34.0% from the revised $98.1 billion in December, reaching a record high of $131.4 billion. This percentage change is the largest since March 2015.

In January, US imports surged by 10.0% to $401.2 billion, the largest increase since July 2020. The import of goods reached a record high of $329.5 billion, with a growth rate of 12.3%. The import of industrial supplies and materials increased by $23.1 billion, mainly in formed metals, possibly gold.

Due to the slowdown in economic growth, the market expects that the Federal Reserve's interest rate cuts this year may exceed recent expectations. According to data from the London Stock Exchange Group (LSEG), traders are pricing a 72 basis point rate cut by the Federal Reserve this year higher than their previous bet on a rate cut of less than 50 basis points. The probability of a rate cut in May has increased from 30% to 49%.

Philadelphia Federal Reserve Chairman Huck said that the US economy is currently in good condition, but there are signs that the consumer sector is under pressure, the inflation outlook is at risk, and the US economy may be brewing trouble.

Under the influence of geopolitical uncertainty, safe haven gold has risen by over 10% so far this year and reached a historic high of $2956.15 on February 24th.

On Tuesday, the United States imposed a 25% tariff on goods imported from Mexico and Canada, and further imposed tariffs on Chinese goods. However, the White House confirmed on Wednesday that it will exempt car manufacturers from tariffs within a month, provided they comply with existing free trade rules.

US President Trump suspended the 25% tariffs on Canada and Mexico on Thursday for a month. This decision is the latest change in the volatile trade policy of the United States, which has caused financial market turbulence and made business leaders uneasy.

This exemption will expire on April 2nd, covering Canada and Mexico, the two largest trading partners of the United States.

Previously, Trump only mentioned exemptions for Mexico, but his latest revised executive order applies to both Canada and Mexico.

In response, Canadian Finance Minister Dominic LeBlanc announced on X that Canada's second wave of retaliatory tariffs on $125 billion worth of US products will be postponed until April 2nd.

For Canada, the revised executive order also exempts tariffs on potassium fertilizer, which is crucial for American farmers. However, energy products have not been fully included in the exemption scope, and Trump has imposed a separate 10% tariff on such products. White House officials stated that this is because not all energy products imported from Canada comply with the provisions of the USMCA.

The tariff exemption will expire on April 2nd, when Trump threatens to implement a global reciprocal tariff system on all US trading partners.

On April 2nd, we will implement equivalent tariffs. We hope that by then, Mexico and Canada have made enough progress on the fentanyl issue so that this part of the discussion can come to an end, and we only need to discuss the issue of equivalent tariffs, "said US Commerce Secretary Lutnik." But if they don't do it, then this issue will still be discussed

Trump also stated that the 25% steel and aluminum tariffs will take effect as planned on March 12th. Canada and Mexico are both major metal exporting countries to the US market, especially Canada, which accounts for the majority of US aluminum imports.

However, the US stock market resumed its recent sell-off on Thursday, and investors expressed concerns about the volatility of tariff issues, which have caused uncertainty. Economists warn that tariffs may reignite inflation that is already difficult to completely contain, leading to a slowdown in demand and growth.

The S&P 500 index closed down 1.8% on Thursday, and has fallen nearly 7% since mid February. This provides support for the gold price.

Bill Sterling, a global strategist at GW&K Investment Management based in Boston, said, "The uncertainty in the market is caused by this' repeated practice of imposing and canceling tariffs at times, 'especially on the issue of tariffs on Mexico and Canada

All eyes are focused on the US non farm payroll report to be released on Friday, which economists surveyed by Reuters expect to show an increase of 160000 jobs in February. In addition, officials such as Federal Reserve Chairman Powell will give speeches on Friday, and investors need to pay attention.

In addition, investors need to continue to pay attention to relevant news on the Russia Ukraine situation.

Insiders say that US President Trump is ready to finalize the Ukraine US mineral agreement, on the condition that Ukrainian leaders agree to a viable ceasefire path and hold talks with Russia.

US Middle East envoy Vitkov said on the 6th that US and Ukrainian officials are discussing arrangements for next week's talks in Saudi Arabia, which will discuss the framework of the Russia Ukraine peace agreement and achieve a preliminary ceasefire between Russia and Ukraine. Witkov said that he has a premonition that the US Ukraine talks will achieve good results and will send a "positive signal" to the Russian side, as they have also shown a "proactive" attitude in promoting negotiations aimed at ending the conflict and achieving peace.