Soaring gold stocks have taken a breather and risk-on sentiment has returned after US President Donald Trump ruled out using fresh tariffs or military force in his quest to acquire Greenland.
The S&P/ASX200 jumped 58.2 points by midday, up 0.66 per cent, to 8,841.1, as the broader All Ordinaries gained 55 points, or 0.61 per cent, to 9,163.8.
The move followed a strong Wall Street session, after President Trump used his speech at the World Economic Forum in Davos to walk back threats against European allies over his designs on annexing Greenland, later hinting at a "framework of a future deal" with NATO.
"It was a 'buy the rumour, sell the fact' event, with US President Trump's speech at World Economic Forum containing much of the madness he is known for but explicitly reassured that the US will not use military force to acquire Greenland," Capital.com senior market analyst Kyle Rodda said.
"When those words were spoken, stocks ripped higher, while the US dollar bounced and gold dropped."
Ten of 11 local sectors were trading higher by lunchtime, while the recently red-hot raw materials sector slumped 1.4 per cent as major profit-taking hit gold stocks.
The precious metals slipped from a record $US4,888 ($A7,200) an ounce on Wednesday to $US4,778, hitting miners such as Northern Star (-7.7 per cent), while the gold sub-sector slipped more than five per cent.
Gold is still up more than 10 per cent in 2026, and more than 80 per cent since the beginning of 2025.
Pantoro Gold was the weakest performer of the S&P/ASX200, after price pressures collided with a quarterly report that underwhelmed investors.
Iron ore giants were mixed, with Rio Tinto extending gains for a second day after breaking a quarterly iron ore production record, while Fortescue tumbled 4.5 per cent in the other direction despite posting record shipments of its own in the first half.
BHP traded flat, a day after conceding to accept lower prices from China's state-backed steelmaker after months of tense negotiations.
Lynas Rare Earths continued higher after its strong quarterly update on Wednesday, up 1.8 per cent.
The heavyweight financials sector rebounded 1.4 per cent, snapping a three-session losing streak and recapturing most of the previous session's losses, as NAB led the big four banks higher following an upgrade from Macquarie.
Commonwealth Bank shares gained 1.5 per cent to $149.38, but remains on par with its price in mid-April 2025.
Energy stocks outperformed the broader market with a more than two per cent gain, as oil prices surged on improved global growth expectations in the wake of President Trump's about-face.
Woodside and Santos rose more than two and four per cent respectively, while coal miners edged lower and uranium play Paladin slipped more than three per cent, facing profit-taking after beating out the top-200 on Wednesday.
A day later, Droneshield was atop the leaderboard with a 6.3 per cent surge, after Bell Potter analysts lifted their price target for the defence technology stock.
The lift in broader sentiment also supported consumer discretionary and health care stocks, with each sector up more than 1.8 per cent, while utilities continued its run, up 1.9 per cent on Wednesday and soaring more than 5.5 per cent this week.
The Australian dollar is buying 67.89 US cents, up from 67.36 on Wednesday at 5pm, spiking in the wake of jobs data, which revealed a surprise employment lift of 65,200 jobs, smashing expectations of 28,300 and narrowing bets on incoming interest rate hikes.
