In the Friday trading session, the XAU/USD metal witnessed a downward trend, trading around the $2,040 level after jumping near $2,060. The metal showed volatility following the release of mixed US economic data, triggering which saw a strong US labor market but a weak Service sector. However, the markets rushed to re-adjust their dovish bets on the Federal Reserve (Fed) and are now betting on higher odds of a sooner beginning of the easing cycle.In December, the US labor market showed robust performance as evidenced by the Nonfarm Payrolls report, which exceeded expectations by adding 216,000 jobs. This figure not only surpassed the consensus prediction of 170,000 jobs but also improved significantly from the previous month’s addition of 173,000 jobs. Additionally, the Average Hourly Earnings witnessed a monthly increase of 0.4%, surpassing the consensus forecast of 0.3% and equalling the rate of the previous month, while the Unemployment Rate for the month remained stable at 3.7%, which was slightly lower than the anticipated 3.8%.On the negative side, the Institute for Supply Management (ISM) Services PMI for December recorded a decline to 50.6, against a market expectation of 52.6, underperforming the previous figure of 52.7, which triggered a decline in the US Dollar, potentially limiting the downside for the metal for the rest of the session.Elsewhere, US bond yields are on an upward trend which is pushing down the metal. The 2-year rate is trading at 4.40%, while the 5-year and 10-year yields jumped back above 4%. That being said, the upside for the yields may be limited as, according to the CME FedWatch Tool, markets are now betting on earlier rate cuts from the Fed. Specifically, the odds of a 25 bps cut in March rose to 70%. It will all come down to the incoming data, and next week, the US will release Consumer Price Index (CPI) figures from December, which may add volatility to the metal.XAU/USD levels to watchReflecting upon the key indicators in the daily chart, the technical scenario illustrates an equilibrium between the buying and selling momentum. The Relative Strength Index (RSI) remains flat, indicating a balance in the buying and selling pressures, yet its location in the positive territory suggests an upper hand for the buyers.The Moving Average Convergence Divergence (MACD) shows flat red bars, which typically signal a seller’s momentum. However, the flatness points to stalling momentum rather than a dominant bearish attitude.Considering the position of the metal in relation to the Simple Moving Averages (SMAs), it stands above the 20,100,200-day SMAs which implies a commanding bullish stance in the larger time frames.

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