The continuing uncertainty over the future of captain Pierre-Emerick Aubameyang has led the Spaniard to consider bolstering his forward line, and according to Sport (via Sports Mole) Jovic is seen as a good option.
The 22-year-old joined Madrid last summer after a breakout season for Frankfurt, but has struggled for the La Liga giants, scoring just two goals in 15 league appearances.
Due to the financial implications of the coronavirus pandemic, a loan agreement for a high-profile replacement may suit Arsenal.
Whether such a deal would suit Madrid is unclear, and Arsenal will likely face competition from across Europe for the forward who moved to the Bernabeu for £54million.
The report suggests that AC Milan are another club seriously considering a move for the Serbia international.