• Gold prices have been buoyed in recent weeks as investors seek safe-havens amid fears of Russia invading Ukraine, but in the longer term, UBS Investment Bank's Joni Teves predicts that recent strength in gold prices will be "short-lived."
• Spot gold recently crossed the $1,900 level, last sitting at $1,908.13 per ounce in the morning of Asia trading hours on Tuesday. That's sharply higher than levels around $1,800 seen in early February.
• Looking ahead, Teves said the gold market is expected to revert back to focusing on macro drivers such as real rates, U.S. Federal Reserve policy as well as the growth outlook.

Gold prices have been buoyed in recent weeks as investors seek safe-havens amid fears of Russia invading Ukraine, but in the longer term, UBS Investment Bank's Joni Teves predicts that recent strength in gold prices will be "short-lived."

She spoke to CNBC on Monday, before Russian President Vladimir Putin ordered forces into two breakaway regions of eastern Ukraine, after he announced the Kremlin will recognize their independence.

Spot gold recently crossed the $1,900 level, last sitting at $1,908.13 per ounce in the morning of Asia trading hours on Tuesday. That's sharply higher than levels around $1,800 seen in early February.

The latest escalation in Ukraine raised doubts over the potential for a diplomatic resolution to the ongoing crisis. U.S. President Joe Biden has since ordered sanctions on the separatist regions of Ukraine, with the European Union also vowing additional measures.

Gold is traditionally seen as a safe investment during times of uncertainty.

Looking ahead, Teves said the gold market is expected to revert back to focusing on macro drivers such as real rates, U.S. Federal Reserve policy as well as the growth outlook. In fact, UBS sees gold prices falling to $1,600 per ounce by the end of 2022.

"An environment where real rates are rising and the Fed is tightening policy does provide a negative backdrop for gold," she said. "We do think that the strength should ultimately … be short-lived."

As the end of the current quarter approaches, the Fed is widely expected to raise interest rates at its March meeting to cool inflationary pressures, and Teves said that's likely to put pressure on gold.

Expectations for higher interest rates tend to push yields of assets such as U.S. Treasurys higher, potentially lowering the attractiveness of a non-yielding asset such as gold.

Still, she acknowledged that the upside risks for gold are rising.

"I think the key risk here is if we start to see reallocation into gold, with the expectation that although real rates are moving higher they are likely to remain in negative territory, and therefore an allocation to gold remains attractive," the strategist said.

Furthermore, allocations to gold could start to rebuild as investors grow more concerned about economic growth slowing down as the Fed tightens policy, she said.