LONDON  - Commodity prices mostly fell this week under pressure from the Federal Reserve's reluctance to inject fresh stimulus into the sluggish US economy and amid stubborn recession fears in Europe.

Markets were also rocked by mounting concern that Spain could be engulfed by the eurozone debt crisis that has already sunk Greece, Ireland and Portugal.

Most markets experienced holiday-shortened trade ahead of the Easter holiday break.

Minutes from the Fed's March policy meeting, published on Tuesday, dealt a blow to hopes of more Quantitative Easing (QE) stimulus measures to boost US growth but the news helped the dollar. The minutes "suggested that the Fed governors were not eager to launch additional stimulus measures right now -- a stance that was not particularly surprising but which nevertheless caused a fair share of damage to a number of markets," said INTL FCStone analyst Ed Meir.

"The impact of the Fed minutes on a number of commodities, many of which were already trading lower heading into the news, was immediate."

A stronger US currency often makes dollar-priced raw materials, like gold and crude oil, more expensive for buyers using weaker currencies, denting demand and weighing on prices.

PRECIOUS METALS: Gold hit a three-month low at $1,612.20 per ounce after the Fed news, dragging other precious metals lower. "Precious metals prices remain under pressure as concerns about demand persist, with markets focusing on a potential slowdown in China and the Fed downgrading the possibility of further QE," Barclays Capital analyst Sudakshina Unnikrishnan said.

By late Thursday on the London Bullion Market, gold dipped to $1,631 an ounce from $1,662.50 the previous week. Silver slid to $31.273 an ounce from $32.43. On the London Platinum and Palladium Market, platinum dropped to $1,592 an ounce from $1,640. Palladium weakened to $635 an ounce from $651.

OIL: World oil prices also tumbled after the US government reported a big jump in the nation's crude stockpiles, adding to concerns about growth in the world's biggest oil-consuming nation.

The Department of Energy said Wednesday that crude reserves soared by nine million barrels in the week ending March 30. That was a far bigger increase than the average analyst estimate for 1.9 million barrels.

Prices were also under pressure from European economic worries and the Fed minutes while simmering tensions over key crude producer Iran provided some support.

US Secretary of State Hillary Clinton warned Iran on Wednesday that time was not "infinite" for diplomacy and that "all options remain on the table" after a dispute over the venue of talks.

Clinton said that the European Union would look into setting a time and place for long-moribund talks on Iran's nuclear programme but vowed that the United States would maintain "strong pressure" to address concerns.

Clinton had earlier said that the talks between Iran and six world powers -- Britain, China, France, Germany, Russia and the United States -- would begin on April 13 in Istanbul. But Iran said Tuesday that it objected to holding the talks in Turkey, which has cut imports of oil from its neighbor in response to US threats of sanctions. Instead, according to Iraq's foreign ministry, Iran formally requested Baghdad hold the April 13-14 negotiations.

London oil trading will be closed on Friday and Monday due to a bank holiday and will reopen for business on Tuesday. However, electronic deals will continue in New York. Investors were on tenterhooks before publication of vital US non-farm payrolls figures on Friday.

By late Thursday on London's Intercontinental Exchange, Brent North Sea crude for delivery in May dropped to $122.17 a barrel from $123.24 on Friday of the previous week. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for May fell to $101.97 from $103.33.

BASE METALS: Prices mostly fell on the strong dollar and amid an absence of Chinese buyers because of public holidays.

"A rebound in the dollar and a lack of buyers due to a Chinese national holiday has not helped," noted CMC Markets analyst Michael Hewson.

"Copper, always an economic bellwether, has slid sharply on the disappointing economic data."

By late Thursday on the London Metal Exchange, copper for delivery in three months fell to $8,405 a tonne from $8,454.25 on Friday of the previous week. Three-month aluminium dipped to $2,094 a tonne from $2,144. Three-month lead eased to $2,020 a tonne from $2,023. Three-month tin retreated to $22,750 a tonne from $23,100. Three-month nickel rose to $18,219 a tonne from $17,510. Three-month zinc edged down to $1,988 a tonne from $2,007.

COCOA: Prices struck the lowest point since early January on hopes of improving supplies from Ivory Coast, which is the biggest global producer of the commodity that is used to make chocolate.

"Improved prospects for the interim harvest in Ivory Coast, which takes place between April and September, caused the price of cocoa to plummet to its lowest level since the beginning of January," said Commerzbank analyst Carsten Fritsch.

The market was also weighed down by news that US cocoa stockpiles were at their highest level for almost five years.

By Thursday on LIFFE, London's futures exchange, cocoa for delivery in July retreated to £1,404 a tonne compared with £1,470 on Friday of the previous week.

In New York on the NYBOT-ICE, cocoa fell to $2,080 a tonne from $2,235.

COFFEE: London prices weakened in line with many other commodities but New York prices rebounded from recent 17-month lows.

By Thursday on NYBOT-ICE, Arabica for May rose to 183.25 US cents a pound from 177.70 cents.

On LIFFE, Robusta for delivery in May fell to $1,988 a tonne from $2,024.

SUGAR: Sugar futures were also mixed in subdued trade.

By Thursday on LIFFE, the price of a tonne of white sugar for delivery in May firmed to $637.80 from $635.30 on Friday of the previous week.

On NYBOT-ICE, the price of unrefined sugar for May dipped to 24.42 US cents a pound from 24.54 cents.