Inflation in July slowed to a 17-month low Gold stocks top...

	  Inflation in July slowed to a 17-month low 

	  Gold stocks top gainers on ASX 

	  Miners extend gains for the third straight session 

(Updates to close)

Australian shares rallied to close higher on Wednesday on broad based gains after inflation eased to a 17-month low, leaving room for the central bank to stand pat on the benchmark rate.

The S&P/ASX 200 index (xjo) ended 1.2% higher at 7,297.70, The benchmark rose 0.7% on Tuesday.

Inflation data showed the annual pace of consumer price increases slowed to 4.9% in July, below market forecasts of 5.2% and under the 5.4% in the previous month.

The markets are now pricing in a 99.5% probability that the central bank would pause its rate hikes for the third straight month in September. 0#RBAWATCH

"The data released today supports the idea that the RBA (Reserve Bank of Australia) would maintain its wait-and-see approach in the September meeting," said Hebe Chen, market analyst at IG Markets.

"However, considering the stickiness of elevated inflation and the distance away from the target zone, it would be premature for the RBA to conclude its tightening journey at this stage."

Gold stocks .AXGD soared after bullion prices climbed nearly 2%, leading gains on the benchmark.

Meanwhile, miners .AXMM extended gains for the third straight session, climbing 1.5%. Sector majors BHP (BHP) and Rio Tinto (RIO) were up 1.5% and 2.3%, respectively.

In New Zealand, the benchmark S&P/NZX 50 index (nz50) closed 0.06% lower at 11,521.12. A Reuters poll found that house prices in the country could rise again next year due to an ongoing supply shortage and expectations of interest rate cuts.