Gold can claim $1,800 in the near term: UBS

After a gloomy March, gold prices are back on the trot, claiming $1,700 levels earlier this month. The yellow metal can now "break the highs" seen earlier this year and climb to $1,800 per ounce, according to UBS Investment Bank.

"Gold is becoming attractive in this environment where uncertainty is very high, growth is expected to weaken, and at the same time you have negative real rates which make gold attractive to hold as a diversifier in investor portfolios," Joni Teves, the precious metal strategist at UBS Investment Bank, told CNBC. "There is growing potential (for gold) to break $1,800 (per ounce) in my view."

The New York-based firm has a near-term target price for gold at $1,790 per ounce.

At the time of writing this article, the price of spot gold was around $1,699.06 per ounce, an almost 12 percent increase year to date. Meanwhile, the Dow has plummeted by 17.8 percent.

Prior to coronavirus, investors were not taking shine to the yellow metal. With the US and global economy booming, investors preferred riskier assets. As a result, in August 2018, the demand for gold fell to its lowest level since 2009.

However, in this environment of uncertainty and negative real rates, investor interest has returned to the yellow metal, noted Teves.