Gold Coast - Defending champion Cameron Smith held a one-stroke lead over Marc Leishman and fellow Australian Jake McLeod after the second round of the Australian PGA Championship at Royal Pines on Friday. 

Smith shot a 7-under 65 for a two-round total of 9-under 135. Leishman, Smith's team-mate last week at the World Cup of Golf in Melbourne, had his second consecutive 68 while McLeod, a co-leader after the first round, shot 70. 

American Harold Varner III, who won the tournament in 2016 and has finished second in a playoff and sixth in three Australian PGAs at Royal Pines, shot his second straight 69 and was three strokes behind. 

"I think I'm a lot better player right now than I was a couple years ago," Varner said. "(The 2016 win) gives me confidence, but it's in the past. It has nothing to do what's going to happen this week."