Sometimes Fonso, we surround ourselves with people. Sometimes, we like to be surrounded by people. At other times, we wish to be alone. We can be surrounded by a sense of security. (or insecurity) We can be surrounded by love, fear, anxiety, hope, people, wealth, and pride, and many other things.

In your example you should use "surrounded by" because it is a passive construction. You could could also say "Your friends and I are surrounding you."

Thank you very much!!

OR I COULD ALSO SAY, "THE FOUR WALLS ARE SURROUNDING ME."

We usually say that someone, some people or something is 'surrounded by' someone, some people or something. In this case, "surrounded" is being used as an adjective, whereas, surrounding is the -ing (continuous) form of the verb "surround/surrounded/surrounded". For example: I am standing in the middle of the room, surrounded (v) by the four walls, so I can also say that I am surrounded by the four walls. The preposition "by" tells us how we are surrounded, i.e., by the walls....