SYDNEY: Australian shares closed higher on Friday, driven by mining and gold stocks on strong underlying commodity prices, while market participants globally awaited the US Federal Reserve policy meeting next week.
The S&P/ASX 200 index ended 0.3% higher at 8,099.9, after hitting its highest in nearly one-and-a-half months earlier in the day. The benchmark gained 1.1% for the week.
The Fed is widely expected to cut rates for the first time since 2020 at the close of its two-day meeting next Wednesday.
The Reserve Bank of Australia (RBA) has however stuck to a hawkish stance by ruling out the possibility of a rate cut this year as inflation remains too high, even though the economy struggles to motor on.
That might change after next week’s jobs data, which will throw light on how well the labour market is handling the extended period of high interest rates.
“If we start to see a trend of weaker macro indicators including on the jobs front, then the RBA could maybe open the door for a potential November rate cut,” said Tim Waterer, market analyst at KCM Trade.
In Sydney, gold stocks benefited from a rally in bullion prices and closed 5.2% higher. They were the biggest percentage gainers on the benchmark.
IG market analyst Hebe Chen expects gold prices to rise further in the months ahead, if expectations for aggressive Fed easing receive further support from the meeting.
Northern Star Resources and Evolution Mining advanced 3.7% and 6.9%, respectively. Mining and energy stocks gained 2.6% and 0.8%, respectively.
Source: Brecorder
