Australian stocks closed higher with the S&P-ASX 200 adding 1.4% to 3588 points, after retreating from a seven-day high earlier in the session of 3659.4 points, while the All Ordinaries matched the mood to close 1.4% higher at 3528.2 points.

Rio recovered slightly from yesterday’s massive 34% plunge after BHP dropped its bid for the diversified miner, closing the session at $42.85, up 2%, after earlier hitting an intraday high of $44.75.

BHP chief executive Marius Kloppers told Dow Jones Newswires after the company’s annual general meeting in Melbourne that it would shut down mines that became unprofitable as a result of lower commodity prices.

"Appropriate action is that if you don't have the prospect of making a profit from a business, is to shut it down until conditions change," he told the newswire.

However, Kloppers declined to comment on whether BHP would consider making another bid for Rio, or for its assets if the miner was broken up.

“We would be very interested in looking at any assets that are tier one, low cost, long life [and] environmentally sound,” he added.

BHP finished the session 5.7% higher at $28.80, but retreated from an opening high of $29.80.

Base metals on the London Metal Exchange, for the most part, jumped overnight with three-month copper up 1.6% to $US3723.50 per tonne, nickel up 0.95% to $10,600/t, zinc up 0.8% $1260/t.

Gold is likely to head "north of $2000" in next the few years as the global macroeconomic situation is resolved, Citigroup chief technical strategist Tom Fitzpatrick told Dow Jones.

"There is an increasing recognition of this at official levels and the monetary and fiscal floodgates are starting to open," he told the newswire.

Spot gold was trading $3.45 higher at $815.20 an ounce at 3.54pm EDT with the bulk of gold plays on the Final Call watchlist following suit.

Newcrest Mining closed 2.6% higher at $A25.66, Lihir Gold up 2.3% at $2.27, Sino Gold Mining up 6.3% at $3.54, and Newmont Mining up 3% at $5.01.

Meantime, Fortescue Metals Group finished up 7% at $1.84, while OZ Minerals added 4.8% to close at 55c.

One of the big movers on the Final Call watchlist today was Geopacific Resources which gained 3c (60%) to close at 8c after uncovering high-grade gold finds of more than 138 grams per tonne at its Faddy’s deposit in Fiji.