The weeks-long war in the Middle East has roiled commodity markets and left investors thinking that "peak pain" may already be behind us, according to Bernstein.
Equity indices tied to the raw materials complex have recovered rapidly. The MSCI World Metals & Mining Index is now within about 5% of its level before the conflict began, reflecting a pronounced V-shaped rebound in mining shares over the past two weeks as market participants increasingly price in a limited earnings impact from the fighting. By comparison, the broader MSCI World Index has fully recovered and sits about 2% higher over the same interval.
Even with the bounce in commodities and equity prices, Bernstein analyst Bob Brackett cautions that many mining stocks remain expensive on a valuation basis. He says multiples for most names in the coverage universe sit above their five-year averages, and that the sector may be approaching a cyclical peak for several key metals - notably copper and zinc.
"We continue to see valuation risks in most of our names," he wrote.
Brackett identifies a couple of exceptions to the generally rich valuations. Newmont and Barrick are noted as trading below their historical averages and are rated Outperform by Bernstein.
The Iran conflict has directly interrupted supply chains for several commodities, with aluminium among the most exposed. The Gulf region accounts for roughly 9% of global aluminium output, and aluminium prices have climbed about 17% since hostilities began. Operational impacts include Qatalum running at approximately 60% capacity and severe damage inflicted on EGA's Al Taweelah facility, which is expected to require a longer recovery period.
"We expect Aluminium to stay higher than mid-cycle price in 2026," Brackett said, while maintaining an Outperform rating on Rio Tinto, a company with meaningful aluminium exposure.
Thermal coal has also benefited amid disruptions to LNG flows, which have pushed coal back into the role of the marginal power source in affected markets. Bernstein highlights Glencore for its significant thermal coal exposure, and suggests the market may be underestimating the upside from Glencore's coal and trading operations.
Gold has reacted differently to the geopolitical shock. Rising inflation expectations driven by higher energy prices have lifted U.S. 10-year real yields above 2.10%, applying pressure on bullion. Gold prices reportedly fell from around $5,300 per ounce to about $4,400 per ounce before partially recovering following ceasefire announcements.
"In the short-term, any conflict escalation would harm gold prices, which could be an excellent opportunity to buy gold. We continue to see demand from central bank for reserve diversification is structural, and unlikely to change due to the war," Brackett said.
Bernstein modestly trimmed its 2026 gold price forecast to $4,818 per ounce but left its longer-term outlook intact, forecasting a gradual rise to $6,100 per ounce by 2030.
Overall, Bernstein's view combines acknowledgement of recent commodity-driven upside with caution about stretched equity valuations across much of the mining complex. The firm highlights specific company-level exceptions and commodity-specific drivers while advising attention to valuation risk as markets digest the evolving conflict.