Gold: Flatlined after the biggest weekly gain since September

Gold is lacking a clear directional bias in Asia, having eked out its biggest weekly gain in nearly three months.

The yellow metal is currently trading at $1,474 per Oz, representing little or no change on the day.

Gold ended last week with a 1.07% gain - the biggest rise since the final week of September. Back then, the metal had rallied by 1.89%.

Dovish Fed

The US Federal Reserve (Fed) on Dec. 11 kept rates steady at 1.5-1.75% and signaled a rate cut pause for 2020. Powell, however, cited persistent high inflation as a prerequisite for interest rate hikes, sending the US dollar lower across the board.

The dollar index, which tracks the value of the greenback against majors, declined by 0.51% last week, having shed 0.60% in the previous week.

The weakness in the US dollar helped gold print a 1% gain despite the US-China phase one trade deal and Brexit optimism.

Fed's balance sheet expansion

The Fed is set to bloat its balance sheet further, having expanded it more than $300 billion since mid-September. 

The central bank is planning to offer a total of $490 billion in liquidity via repo operations for the turn of the year, including the $75 billion that it has already pumped in through three earlier term actions, according to Bloomberg. 

As a result, the balance sheet is seen expanding to $4.5 trillion next month from the current $4.1 trillion.

Historically, gold has cheered the Fed's balance sheet expansion.

Gold technical levels