TORONTO (Reuters) - Toronto's main stock index finished the session at its highest closing level since April yesterday as gold prices hit a record high and other commodity prices gained, lifted by expectations that the US Federal Reserve will keep its policies steady at a meeting this week.

The index was firing on all three of its most powerful sectoral cylinders - materials, up 0.8 percent; energy, up 0.7 percent; and financials, 0.3 percent higher.

Gold miners rose 0.6 percent as bullion prices rallied for the fourth straight day, boosted by growing expectations that US interest rates will remain exceptionally low as the economy struggles.

Barrick Gold Corp., the world's No.1 producer, gained 0.6 percent to C$47.80, and Goldcorp Inc. added more than two percent to C$44.91.

"With gold still up on the day and oil recovering...it doesn't take very much to get things going," said Irwin Michael, a portfolio manager at ABC Funds.

Other big gainers included oil company Canadian Natural Resources, up 0.9 percent at C$34.58, and Manulife Financial, which jumped 3.8 percent to C$13.48.

The move comes a day ahead of a Fed meeting at which the central bank is expected to keep current stimulative measures in place but is not seen taking new steps to ease monetary policy.

"I think most people think it will be unchanged and there's a lot of cash on the sidelines," Mr. Michael said.

Driving momentum, the S&P 500 also closed at a four-month high as a long-awaited break above a technical range and a flurry of positive corporate news increased investor optimism.

Mr. Michael noted "there's been incredible bearishness out there," and that Canadian investors were reassured by the dramatic rally south of the border, while getting ready to add to their portfolios ahead of the quarter end next week.

The Toronto Stock Exchange's S&P/TSX composite index closed up 69.95 points, or 0.6 percent, at 12,234.51, its highest finish since April 26. Nine of the index's 10 main groups were higher. Healthcare stocks were down 0.7 percent.

Also boosting the TSX, heavyweight Potash Corp. was up 0.6 percent at C$152.53 despite BHP Billiton's chief executive saying the Anglo-Australian miner has no intention of changing its $39 billion takeover offer for the world's biggest fertiliser producer.

Base-metal miners climbed 2.2 percent and First Quantum Minerals shot up 3.7 percent to C$69.91 as the price of copper was lifted by market talk of further quantitative easing by the Fed.

Teck Resources, however, fell 0.6 percent to C$39.10 after Canada's largest base-metals producer trimmed its third-quarter and full-year coal sales forecast.

Research In Motion fell almost 3 percent to C$46.38, after India asked mobile phone operators to upgrade their networks to help security agencies intercept communication on BlackBerry devices.