On Friday, gold prices surged as the Bank of Japan surprised the markets with some hawkish signals, recouping some of the previous losses. However, the attraction of metal was constrained by the strength of the dollar.

Spot gold edged up by 0.3% to $1,951.49 per ounce, meanwhile gold futures added 0.2% to $1,950.15 per ounce.

The Bank of Japan announced a more accommodating approach to its yield curve management policy, indicating a potential reversal away from the bank's ultra-dovish attitude, which caused markets to become somewhat risk-averse.

Although the action indicates future increases in pressure on gold, the BOJ's shock in the short term caused markets to seek out safe haven assets.

While the yellow metal had some relief on Friday, it was still nursing significant losses from the previous session as statistics revealed that the U.S. economy grew faster than anticipated in the second quarter. Gold is therefore projected to experience weekly losses as a result of the strong GDP that is boosting the dollar.

The figure increased the value of the dollar and reduced the value of gold by more than 1% as traders bet that the robustness of the American economy would allow the Federal Reserve to continue raising interest rates.