By Roshan Thomas

Sept 16 (Reuters) -Australian shares ended higher on Monday and briefly neared their all-time high during trade, helped by strong gains in the banking sector, with investors globally waiting for the U.S. Federal Reserve's monetary policy decision with bated breath.

The benchmark index S&P/ASX 200 .AXJO ended 0.3% higher at 8,121.6 points, its third consecutive session of gains. It jumped up to 8,145.0 earlier in the day, just a whisker away from the all-time high of 8,148.7 scaled on August 1.

Heavyweight banking index .AXFJ rose 0.9% with the "Big Four" banks advancing between 0.2% and 2.2%.

"The big banks have been driving the ASX this year as they initiated unprecedented buy-backs amid strong results," Glenn Yin, head of research and analysis at AETOS Capital Group, said.

The banking index, which constitutes just over a quarter of the benchmark in terms of market weight, is now up 25.8% so far this year, significantly outpacing the mining index .AXMM which is down around 19%.

Meanwhile, investors across the world now await the U.S. Federal Reserve's decision later in the week, with traders now pricing in a 59% chance of a half-point rate cut, according to CME FedWatch tool. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing.

"A Fed cut will send a strong signal across the board that the official tightening cycle is now finished, the battle against inflation is also out of the window," Yin said.

"This could really unravel the 'cortisol' inside RBA and potentially encourage a shift to a dovish stance."

Elsewhere in the local bourse, gold stocks .AXGD closed 0.3% higher after jumping up to 2.3% earlier in the day,tracking a surge in bullion prices. GOL/

Shares of Evolution Mining EVN.AX and Northern Star Resources NST.AX were each up by 4.2%and 1.5% respectively.

Miners .AXMM were down 0.3% with behemoths BHP GroupBHP.AX and Rio Tinto RIO.AX losing 0.1% and 0.6%,respectively, and also weighed on the benchmark's gains.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 lost 1% to 12,704.39 points.

Reporting by Roshan Thomas in Bengaluru; Editing by Nivedita Bhattacharjee

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