UBS analysts say the ceasefire between the U.S. and Iran changes the risk profile for mining stocks, making copper and gold equities the most appealing opportunities if the truce endures and energy markets normalize. The bank had previously framed the outlook for miners as binary - hinging on whether conflict-driven energy-price shocks would persist. With a ceasefire announced, UBS expects the primary threat to the sector - a sustained spike in energy costs that could undercut industrial metals demand - to be less likely should transit through the Strait of Hormuz return to regular levels.
"We believe Copper equities offer the most attractive risk vs reward if de-escalation and energy price normalisation persists, followed by gold equities," the analysts, led by Daniel Major, wrote in a note.
Copper equities have already taken a sizable hit since the conflict began, falling roughly 20%. UBS interprets that pullback as a buying window, arguing the constructive fundamental case for copper remains intact and may even be stronger. The bank highlights a near-term supply concern from Ivanhoe's Kamoa-Kakula operation - a production downgrade on the order of 100,000 tonnes per year for 2026-27 - as an additional supportive factor for copper markets. The analysts also point to the likelihood that volatile energy prices will bolster investment in renewables, electricity grids and reshoring efforts, trends that would further underpin copper demand.
On individual names, UBS singles out First Quantum, Freeport-McMoRan, Anglo American and Teck as preferred copper equity picks.
Gold equities have likewise fallen by about 20% since the start of the conflict. UBS views the retrenchment in select gold stocks as an opportunity, while cautioning that the strong earnings upgrade cycle which propelled gold miners over the prior two years is unlikely to continue and could reverse. Even so, with gold trading in the $4,000s per ounce and large producers' all-in sustaining costs below $2,000 per ounce, UBS judges cash margins remain attractive and valuations generally undemanding.
Preferred gold-related names from the bank include Newmont, Endeavour, SSR Mining and Skeena, alongside streaming companies Wheaton Precious Metals and Franco-Nevada.
Aluminium presents a more nuanced picture. London Metal Exchange prices for aluminium have risen by about 10% since the conflict began, outperforming copper by roughly 15 percentage points. Part of that strength has been attributed to damage to smelter capacity in the Middle East, including disruptions to facilities operated by EGA and Alba. UBS expects some of aluminium's outperformance to reverse if shipping through the Strait of Hormuz fully reopens, but nonetheless believes supply losses this year will more than offset any demand softening and keep prices supported.
Alcoa and Norsk Hydro, both up around 20% since the conflict began, are expected by UBS to surrender some of their gains but to benefit from a higher-for-longer price backdrop.
The analysts' conclusions rest on the conditional scenario that the ceasefire is durable and that energy price volatility abates. Under that assumption, copper equities lead the list of attractive risk-reward opportunities, followed by selected gold stocks, while aluminium remains supported by disrupted capacity even if some wartime premiums unwind.