Gold stocks are set to boom thanks to the commodity's price and merger activity, with UBS slapping a buy on its entire gold coverage list with the exception of Newcrest and Independence Group.

UBS put out the note as the sector enjoys a boost from a wave of mergers and acquisitions this year, with 26 deals worth in total $1.7 billion.

Gold has recovered from its March lows of $US1150 an ounce and is now trading near $US1188. Credit:Eddie Jim

Gold has recovered from its March lows of $US1150 an ounce and is now trading near $US1188 ($1533).

"With the exception of Newcrest and Independence Group, we have buy ratings on our entire gold coverage list," said UBS.