TORONTO (Bloomberg) - Canadian stocks rose the most in three weeks, led by commodity producers, as prices of bullion and crude oil increased on escalating tensions in the Middle East and the declining US dollar.

Barrick Gold Corp. climbed 10 percent, pacing gains among mining companies. EnCana Corp. gained more than 5.6 percent, leading oil and gas shares higher.

The Standard & Poor's/TSX Composite Index rose 3.9 percent, to 8,637.29 in Toronto, the most since December 10. Canada's main stock benchmark has slid 38 percent in 2008 as falling commodity prices and global credit writedowns dragged down the energy, mining and finance shares accounting for 75 percent of its value.

"The Middle East violence is causing most commodities to move up," Michael Smedley, who helps manage about $1.2 billion at Morgan Meighen & Associates in Toronto. "There's some buying in the depressed commodity stocks. They could be short-term winners."

About 320.1 million shares changed hands in Toronto today compared with the three-month daily average of 529.5 million. Canadian equity exchanges were closed on December 25 and on December 26 for the Christmas Day and Boxing Day holidays. US stock markets opened for trading on December 26.

Gold advanced 0.5 percent to $875.30 an ounce in New York and touched $892, the highest in 11 weeks, as investors sought a haven. Silver also surged. Israel massed tanks today near the Gaza Strip following three days of air strikes as Defence Minister Ehud Barak said the country is fighting a "war to the death" with Hamas.

Copper prices climbed in London as a slumping US dollar buoyed the appeal of commodities as an alternative investment.

Barrick Gold, the biggest bullion mining company, rose C$4.28 to C$45.34. Smaller rival Goldcorp Inc. jumped 11 percent to C$38.50. Silver Wheaton Corp., which buys silver from other miners, added 16 percent to C$7.89.

Potash Corp. of Saskatchewan Inc., the largest maker of crop nutrients, rose 9.6 percent to C$89.50. Teck Cominco Ltd., Canada's biggest diversified mining company, rose 16 percent to C$5.82.

The stock has still lost 84 percent of its value in 2008 as zinc and copper prices slumped.

A measure of raw-materials stocks gained 10 percent yesterday, paring its decline in 2008 to 28 percent. A gauge of energy shares added 4.5 percent.

EnCana, Canada's biggest energy company by market value, rose 5.6 percent to C$54.40. Canadian Natural Resources Ltd., the nation's second-biggest natural-gas company, gained 5.7 percent to C$45.75. Suncor Energy Inc., the world's second-largest oilsands producer, rose four percent to C$22.88.

Oilexco Inc. a producer of oil and gas in the North Sea that's lost 93 percent of its value this year, advanced 29 percent to 89 cents, the most yesterday among stocks in the S&P/TSX.

Crude oil for February delivery rose 6.1 cents to $40.12 a barrel in New York. Yesterday's gain pares oil's plunge from its $147.27 record on July 11 to 73 percent.

Natural gas futures gained on a forecast for colder weather to cover most of the US next week, boosting heating demand.