09:18 AM EDT, 08/12/2025 (MT Newswires) -- Gold futures fell early on Tuesday even as the dollar and treasury yields dropped after a report showed U.S. inflation was steady last month, keeping expectations for a coming cut to U.S. interest rates in place.

Gold for December delivery was last seen down US$6.30 to US$3,398.40 per ounce.

The drop comes as the Bureau of Labor Statistics reported U.S. inflation rose at a 2.7% annualized rate in July, unchanged from June and under the FactSet consensus estimate for a 2.8% annual pace. Core inflation, excluding volatile food and energy, rose 0.3% from June, up from 0.2% in the prior month but matching the consensus estimate.

"The release of the July CPI figures today ... are expected by many to show whether the Trump administration's tariffs are impacting inflation data, as this is seen as the first full month to see more of the impacts of the tariffs," Saxo Bank noted.

Still, the release comes with a question mark after U.S. President Donald Trump earlier this month fired the head of the Bureau of Labor Statistics after the agency reported a weak July jobs report and large downward revisions to its hiring data for the prior two month as he claimed the numbers were rigged.

The report is unlikely to change expectations the Federal Reserve will cut interest rates by 25 basis points at the end of its next policy meeting on Sept.17. The CME Fedwatch Tool sees an 82% probability the central bank will lower rates at the meeting.

The dollar weakened following the data, with the ICE dollar index last seen down 0.19 points to 98.33. Treasury yields also weakened, with the U.S. two-year note last seen paying 3.75%, down 3.3 basis points, while the yield on the 10-year note was down 1.2 points to 4.277%