Gold prices retreated on Friday as upbeat U.S. retail sales somewhat eased fears that the economy was slowing down in the second quarter.

Prices had jumped 1% earlier in the session on market expectations of at least two U.S. central bank rate cuts in 2019.

Spot gold was up 0.4% at $1,347.01 per ounce. Prices rose to a high of $1,358.04, last touched on April 11, 2018. The metal was set to gain for a fourth straight week, up 0.8%.

U.S. gold futures settled 80 cents higher at $1,344.50.

"Because of growing fears of a recession every participant is wondering is it time when gold is going to break out of this range, and trade substantially higher," said Daniel Ghali, commodity strategist at TD Securities.

"At the same time expectations of a Fed cut are growing. Gold obviously performs well in that environment."

Robust U.S. retail sales in May suggested a pickup in consumer spending that could ease fears the economy was slowing down sharply in the second quarter. The data has "dispelled the need for an immediate Fed cut. The market is just paring back its expectations a little bit," Ghali added.

Recent soft U.S. economic readings have boosted expectations of a U.S. Federal Reserve interest rate cut. Policymakers are scheduled to meet June 18-19, with financial markets pricing in at least two rate cuts by year-end.

In addition to weighing on the dollar, lower interest rates also cut the opportunity cost of holding non-yielding bullion.

A China-U.S. trade war has threatened to escalate, potentially pushing the global economy into recession.

Trade tensions have also spurred concerns about China's economy, with industrial output growth unexpectedly slowing to a more than 17-year low and investment cooling.

"In people's minds there is a sense of a deeply darkening macroeconomic backdrop, in particular the likelihood that the U.S. will drop interest rates quite soon," said Ross Norman, chief executive officer at bullion dealer Sharps Pixley.

Among other precious metals, spot silver was up 0.6% to $14.98 per ounce, while platinum dipped 0.2 % to $809.10.

Palladium gained 0.9% to $1,457.60 per ounce, on track for its best week since September 2018. Prices were up for a seventh straight session.