09:25 AM EDT, 08/05/2025 (MT Newswires) -- Gold prices dropped early on Tuesday as the dollar and yields strengthened after the United States reported its trade deficit fell to a near two-year low in June as imports slowed.

Gold for December delivery was last seen down US$20.80 to US$3,405.60 per ounce.

The U.S. Bureau of Economic Analysis reported the country's trade deficit narrowed to US$60.2 billion in June, the lowest since September 2023, as imports fell to US$265 billion, down US$12.8 billion from May.

The tightening deficit comes as U.S. consumers adjust to the Trump Administration's trade policies that make imports more expensive, The Bureau noted that the bulk of the drop came on a US$12.6-billion drop in goods imports, while exports also weakened by US$1.2 billion in June.

The dollar rose following the data, with the ICE dollar index last seen up 0.24 points to 99.03.

Treasury yields also rose, bearish for gold since it offers no interest. The U.S. two-year note was last seen paying 3.712%, up 2.7 basis points, while the yield on the 10-year note was up 2.0 points to 4.217%.