Australian shares rose on Friday and were set for a weekly gain, as commodity stocks advanced on strong prices for gold, oil and iron ore, while investors globally looked forward to the US Federal Reserve policy meeting scheduled next week.

The S&P/ASX 200 index rose 0.8% to 8,134.5 by 1230 GMT to linger near a record high, and was set for a 1.5% weekly gain.

Miners led the gains, rising 2% for the day as iron ore prices soared on expectations of stronger seasonal demand in China.

Top miners BHP Group and Rio Tinto rose 1% and 1.2%, respectively.

The sub-index has risen 4.3% so far this week and is set for its best week since September 2023.

Gold stocks rose more than 4% and were poised for their best day since early March and best week since mid-July, with expectations of a Fed rate cut next week bolstering bullion prices.

Markets are pricing in a 25 basis point rate cut by the Fed next week, according to the CME FedWatch tool, after recent economic data pointed towards a slowing economy.

Among other sub-indexes in Sydney, energy rose 1.9% on strong oil prices as producers evaluated how Hurricane Francine might affect output in the US Gulf of Mexico.

Sector major Woodside Energy was up 2.6%, while smaller rival Santos jumped 1.2%.

Brent crude futures rose 0.49% to $72.32 a barrel, while US West Texas Intermediate (WTI) crude gained 0.59% to $69.38 per barrel.

Australian shares climb as energy stocks, banks shine

Technology stocks climbed about 0.3%, tracking overnight gains in Wall Street peers. Overnight, the US Dow Jones Industrial Average rose 0.58%.

The S&P 500 gained 0.75%, while the Nasdaq climbed 1%.

New Zealand’s benchmark S&P/NZX 50 index fell 0.2% to 12,795.66.