According to Zhitong Finance APP, as the Russia-Ukraine conflict escalates, the market has once again exhibited traditional risk-averse sentiment. On Tuesday, the fluctuations in the bond market and gold prices reflected investors' cautious attitude. However, from the details of the market, traders' responses may not be as tense as they appear.

On Tuesday, the u.s. 30-year treasury bonds yield (TMUBMUSD30Y) fell by as much as 8 basis points, although it later rebounded. This extent of movement is comparable to the technical adjustments seen in the market on Monday. It is well-known that bond prices move inversely to yields, indicating an increased demand for safe-haven assets, although the extent is limited. Meanwhile, performance in the u.s. stock market was mixed, with the Dow Jones down 0.28%, s&p 500 up 0.4%, and nasdaq gaining 1.04%.

Will Compernolle, a macroeconomic strategist at Chicago FHN Financial, stated: 'The market may have shown a clear risk-averse reaction initially but gradually returned to a wait-and-see mode.'

Gold futures prices rose 0.6% on Tuesday, closing at $2,631 per ounce, the highest level since November 8. This increase was driven not only by the geopolitical tensions from the Russia-Ukraine conflict but also by uncertainties within the u.s., particularly regarding investors' speculation about President-elect Donald Trump's cabinet choices.

Peter Grant, vice president and senior metal strategist at Chicago Zaner Metals, noted that if the Russia-Ukraine conflict further escalates, gold prices could soar to $3,000 per ounce or even higher. However, as of now, gold prices remain below the historical high of $2,800.8 set on October 30.

Adrian Ash, head of research at BullionVault, stated: 'The current rise in gold prices continues the market's previous trend, just as european henry hub natural gas and oil prices have risen due to the arrival of winter.'

On Tuesday, Russian President Putin signed a new nuclear weapons usage policy document, lowering the threshold for the use of nuclear weapons. This move appears to be a further escalation of the situation, but in reality, it is a formal confirmation of the policy proposed in September, and the actual impact may not be as strong as initially thought. Meanwhile, Ukraine has gained support from U.S. President Biden, further exacerbating geopolitical tensions.

Compernolle pointed out that there are still many uncertainties about how future conflicts will affect the bonds market. "Typically, an escalation of conflict leads to a decline in the stock market and an increase in bond prices, but the specific consequences are difficult to predict in advance."

Although safe-haven assets show some attractiveness in the current situation, the overall market response remains relatively restrained. Investors are closely monitoring the latest developments in the Russia-Ukraine situation while waiting for further economic and policy signals.