By Ines Ferre

UBS analysts are making the case for gold prices (GC=F) to rise, with the once-high-flying precious metal rallying over the past week.

Gold futures have climbed more than 4% over the past five sessions, according to Yahoo Finance's AlphaSpace data, fueled by buying from Chinese investors and inflows into exchange-traded funds (ETFs).

Recent moves by the United States and Japan to shore up the yen also eased fears of a sell-off in US Treasurys, which would have driven bond yields higher, creating a backdrop that's typically a headwind for precious metals.

"Gold's rally has support," UBS chief investment officer Ulrike Hoffmann-Burchardi and her team wrote on Thursday. "We expect gold prices to rise toward USD 5,000/oz in the first half of 2027."

Gold prices have declined since the war in Iran broke out at the end of February. Although the UBS strategists see near-term risk if oil prices rise or markets price in a more hawkish Federal Reserve rate path, making bonds more appealing, they're bullish medium to long term on prospects for the precious metal.

Hoffmann-Burchardi said her team expects inflation to gradually moderate, allowing the Fed to hold interest rates steady this year before resuming easing in 2027.

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"This should create a more favorable backdrop for gold, as a shift toward lower policy-rate expectations would likely reduce real yields, weigh on the US dollar, and help boost investment demand for gold," they said.

Central banks are also expected to continue gold purchases, providing a floor to the market.

Gold prices are relatively flat year to date, after jumping by more than 65% in 2025.

Gold bars are stacked in a vault at the United States Mint on July 22, 2014, in West Point, N.Y. (AP Photo/Mike Groll, File)

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.