Gold inched higher on Friday, on track for a gain of more than one per cent in July, as the dollar extended its losses after the Bank of Japan's stimulus fell short of market expectations.
The Bank of Japan expanded monetary stimulus on Friday through a modest increase in purchases of exchange-traded funds, yielding to pressure from the government and financial markets for bolder action to spur growth and accelerate inflation towards its 2 per cent target.
By coordinating its action with the government's big fiscal spending package, the BOJ likely aimed to maximise the effect of its measures on the world's third-biggest economy, which is struggling to escape decades of deflation.
The yen rose about 2.14 per cent to 102.99 against the dollar, and the dollar index, which measures the greenback against a basket of currencies, was down 0.4 per cent at 96.316.
Spot gold was up 0.4 per cent at $1,341.16 an ounce at 0430 GMT. Bullion has risen 1.2 per cent in July, its second straight monthly gain, and is heading for its first weekly gain in three.
US gold was up 0.4 per cent at $1,337.90 an ounce.
"With so many cross currents at play over the short-term, we would rather watch the action in gold from the sidelines for the time being, at least until Friday's news from both the US and Japan is out of the way,” INTL FCStone analyst Edward Meir said in a note ahead of the BoJ statement.
GDP, jobs data
US advance GDP data and employment wages figures, both for the second quarter, are due later in the day.
Spot gold looks neutral in a range of $1,333.99-$1,346 per ounce, and an escape will point a direction, according to Reuters technical analyst Wang Tao.
Meanwhile, palladium, rose 0.9 per cent at $701.65 an ounce, after touching its highest since October 2015 in the previous session. It is up nearly 17 per cent this month, and on track to notch its best monthly performance since February 2008.
Platinum rose 1.2 per cent at $1,140.50 an ounce and was on track for its best month since January 2012, with a more than 11 per cent growth this month. It had hit a 14-month high on Wednesday.
"We are bullish on the PGMs (platinum group metals) fundamentally but we are unclear as to whether or not fundamental motivations have been driving the current PGM rally,” HSBC analyst James Steel said in a note.
Silver was up 0.3 per cent at $20.21 an ounce and was heading towards a second straight monthly gain, having risen over 8 per cent in July.