Australian shares closed the week higher, tracking Wall Street markets and other Asian markets, as concerns over a US recession eased and investors were encouraged to remain calm amid the recent equity sell-off and heightened trade tensions.

The S&P/ASX 200 Index rose 0.5% or 40.6 points to close at 7,789.7.

"We came in with the market being fully priced, so I think a 5% to 10% correction on the S&P or the Nasdaq actually makes sense," said Former Treasury Secretary Steven Mnuchin in a Bloomberg interview.

The Federal Reserve's Treasury-based recession model signaled increased recession risk a year ago. Historically, a reading above 30% signals a recession, with the current probability at 29.76%, Bloomberg reported.

On the domestic front, Australian household spending fell in February as consumers prioritized essentials over discretionary items despite sales tactics during the Valentine's Day period, according to a report by CommBank.

The CommBank Household Spending Insights Index declined 0.2% month on month in February.

Australian mining stocks advanced on Friday after gold hit a new record high as investors rushed to the safe-haven asset amid rising trade and economic uncertainties.

Australian miners Evolution Mining (ASX:EVN) gained 5%, Northern Star Resources (ASX:NST) gained 3%, and Newmont Corporation (ASX:NEM) advanced 6% at market close.

ANZ Group Holdings (ASX:ANZ, NZE:ANZ) agreed with an arrangement for the Australian government to provide the banking group with a limited guarantee of up to AU$2 billion for 10 years for its current Pacific operations.

Lastly, more than 400 workers at Rio Tinto Group's (ASX:RIO) Paraburdoo operations signed a petition for a collective agreement asking the mining giant to raise their pay, among other demands. Shares of the company rose 1% at market close.