By Clara Denina
LONDON: Gold jumped 1.3 percent on Friday as the dollar retreated further after U.S. retail sales data were unexpectedly flat in July.
Friday's unchanged reading for last month suggested consumer spending was cooling after the second quarter's brisk 4.2 percent rate of increase.
Economists had forecast overall retail sales rising 0.4 percent and core sales climbing 0.3 percent last month.
Spot gold (XAU=) rose to a session high of $1,355.80 an ounce and was up 1 percent at $1,352.11 by 1330 GMT.
"Prices had a new incentive to break higher, with a weaker dollar and lower than expected data from the U.S., which should further discourage the Fed to do anything on rates," Saxo Bank senior manager Ole Hansen said.
"As long as gold stays above $1,300 there is no reason why funds holding big longs should worry too much."
The dollar fell 0.5 percent against a basket of main currencies after data prompted investors to roll back expectations on when the Federal Reserve will raise rates.