The mr gasket is not a great low pressure regulator. You want to consider using a redline regulator

https://www.carburetion.com/Products/ProductDetails.aspx?Part=31800.050

Or the higher end aeromotive regulator

https://www.pegasusautoracing.com/productdetails.asp?RecId=26867&msclkid=3fb6c1eb59a01924b5e0a19515eb0c65&utm_source=bing&utm_medium=cpc&utm_campaign=Shopping&utm_term=1100404266713&utm_content=Ad%20group%20%231

You also need to use a low pressure gauge that is accurate. I went through them all, really difficult to find one that is accurate at the lower end of the reassure spectrum. This is the one I ended up settling on

https://aeromotiveinc.com/product/0-15-psi-fuel-pressure-gauge/

From your description it sounds like too much pressure and it’s overcoming the needle.

Mike