By Dominic Lau

LONDON (Reuters) - The FTSE fell for a third day in a row on Tuesday as commodity stocks weighed, though miner Eurasian Natural Resources (ENRC.L: Quote, Profile, Research) rose on market talk of a merger with rival Kazakhmys (KAZ.L: Quote, Profile, Research).

The commodity-heavy FTSE 100 .FTSE closed down 50.3 points or 0.9 percent at 5,827.3, hitting its lowest closing level since late March. The UK benchmark index has fallen 3.7 percent so far this month and is down nearly 10 percent for the year.

"A lot of people view the 5,800 level as quite a key one for the FTSE 100. We saw the market in mid-April traded down from here and bounced quite sharply to rally up to 6,400 a month later," said David Jones, chief market strategist at IG Index.

"This is really a make-or-break zone for the FTSE 100. If we see a break of 5,800, we are looking at a move back to 5,400 lows."

Miners fell along with metal prices. Gold fell more than 2 percent as the dollar rose after U.S. Treasury secretary Henry Paulson said he stood by comments made a day earlier, in which he said he would never rule out currency intervention as a potential policy tool.

BHP Billiton (BLT.L: Quote, Profile, Research), Rio Tinto (RIO.L: Quote, Profile, Research), Xstrata (XTA.L: Quote, Profile, Research), Antofagasta (ANTO.L: Quote, Profile, Research) and Lonmin (LMI.L: Quote, Profile, Research) were down between 1.2 and 3.8 percent.

Eurasian Natural Resources, however, climbed 2.9 percent after Kazakhmys said it planned to raise its stake in its rival to above 22 percent, leading to market talk of a union between the two companies. Kazakhmys was up 2.3 percent.

Vedanta Resources (VED.L: Quote, Profile, Research) gained 0.7 percent, with Morgan Stanley starting the company with an "overweight" rating.