Gold and silver prices retreated Friday as investors shrugged off weak consumer sentiment data and stepped back into stocks to give the S&P 500 a two-day winning streak for the first time since mid-July.

Gold for August delivery on the CME Comex slipped $8.60 to settle at $1,740.20, and silver ended the day down 46 cents to $39.10.

The S&P 500 rose 6.17 to 1,178.81, the Dow Jones industrial average added 125.71 to 11,269.02 and the Nasdaq Composite gained 15.30 to 2,507.98. Despite the two-day gains, the stock market posted its worst three-week decline since March 2009, when equities hit 12-year lows.

Although the Census Bureau said U.S. consumers increased retail spending by 0.5 percent last month, the best such gain in three months, consumer sentiment dropped sharply in August, to the lowest levels since the recession-marked period of May 1980, according to Thomson Reuters/University of Michigan.

The consumer sentiment reading dropped to 54,9 the lowest level since 1980, according to the survey, from 63.7. The reasons are clear: political uncertainty that emerged during debt ceiling talks, the S&P credit rating downgrade of the U.S., talk of another recession, and stock market turbulence.

"The drop in expectations seems to be that the political situation got peopled soured and financial markets have gotten people unsettled," said Stephen Stanley, an economist at Pierpoint Securities, in an interview with The Telegraph. "People are getting tird that we still haven't seen a recovery."

Meanwhile, the U.S. unemployment rate remains above nine percent despite the the recession officially ending two years ago.

Silver stocks were mostly higher, with Silver Wheaton up 24 cents to $37.29 and Pan American Silver Corp. adding 10 cents to $29.16.

Gold stocks ended mixed.