Markets Stay Cautious Amid Geopolitical Uncertainties (08.14.2026)

Global markets traded cautiously as investors balanced cooling U.S. inflation against persistent geopolitical uncertainty in the Middle East. 

Softer CPI and producer price data reduced expectations for a September Federal Reserve rate hike, while gold and silver retreated as traders took profits following recent gains. The euro remained supported by ECB tightening expectations and resilient Eurozone growth, while sterling held near recent highs following solid UK GDP figures. Meanwhile, the yen headed for a weekly decline as the impact of recent intervention continued to fade.

Euro Holds Near $1.153

The euro stabilized around $1.153 on Friday as markets evaluated Middle East geopolitical shifts, uncertain US-Iran agreement signals, and energy-driven inflation pressures. Eurozone inflation expectations held near 2.4%, surpassing the ECB's 2% target after July figures reached 2.9%. However, underlying economic strength improved the broader outlook, supported by second-quarter GDP expansion of 0.4%. Given persistent price pressures and resilient economic activity, investors maintain expectations for a 25-basis-point European Central Bank rate increase in September.

The first resistance is positioned at 1.1570 while the support starts from 1.1500.

Gold Falls Below $4,350

Gold slipped below $4,350 per ounce on Friday, continuing its downward slide as investors locked in profits while evaluating Federal Reserve policy signals and Middle East geopolitics. Tame US producer price data supported indications of moderate inflation following a muted CPI report, dropping September rate hike probabilities to roughly 35%. However, lingering uncertainty surrounding delayed efforts to reopen the Strait of Hormuz maintained market caution regarding potential energy price spikes and renewed geopolitical friction.

First resistance is seen at $4385, with initial support near $4280.

Yen Heads for Weekly Loss

The Japanese yen hovered near 159.4 per dollar on Friday, heading toward a 1% weekly decline as the absence of additional official intervention emboldened short positions. The currency has now erased roughly half its recent gains following late July's record joint market intervention by Tokyo and Washington. Wide interest rate differentials, fiscal uncertainties, and elevated energy and import costs continue to exert persistent pressure on the yen.

First resistance is seen at 160.00, with initial support near 158.80.

Sterling Slips Below $1.35

The British pound pulled back below $1.35 as investors weighed solid UK economic indicators against ongoing Middle East geopolitical friction. Second-quarter UK GDP grew 0.4% quarter-on-quarter, meeting forecasts, backed by a stronger 0.3% rise in June. However, household consumption growth moderated to 0.2%, signaling persistent consumer financial pressure despite overall economic resilience.

From a technical view, resistance stands near 1.3530, with support around 1.3440.

Silver Drops Below $64

Silver slid below $64 per ounce on Friday, continuing previous losses as investors secured profits and reevaluated Federal Reserve monetary policy. Cooler US core producer price data for July further confirmed moderating inflation following earlier soft CPI figures. Financial markets reduced expectations for a 25-basis-point September rate hike to approximately 35%, down from 55% the previous week.

From a technical view, resistance stands near $65.00, while support is located around $63.05.