By Nicholas Larkin and Kyoungwha Kim Feb. 12 (Bloomberg) -- Gold prices fell as China unexpectedly increased bank-reserve requirements, sending commodities and equities lower, while boosting the dollar. The greenback jumped as much as 0.9 percent against a basket of major currencies, eroding the investment appeal of precious metals. The euro fell against the dollar on deficit concerns in Greece. The Standard & Poor’s 500 Index dropped as much as 1.4 percent. The Reuters/Jefferies CRB Index of 19 raw materials fell for the first time this week. “Gold is reacting to liquidity constraints implemented by the People’s Bank of China and a further strengthening of the dollar,” said Bayram Dincer, a commodity analyst at LGT Capital Management in Pfaeffikon, Switzerland. Gold futures for April delivery dropped $4.70, or 0.4 percent, to $1,090 an ounce on the Comex division of the New York Mercantile Exchange. This week, the price climbed 3.5 percent, halting a four-week slump. China’s policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year, analysts say. European Union leaders left open how they would respond to a fresh wave of speculation against the bonds of Greece or countries such as Spain and Portugal, which are also struggling to cut deficits. Yesterday, gold climbed 1.7 percent, the most in a week, as heightened optimism for an economy recovery bolstered commodities. “After the performance yesterday, there’s a bit of profit- taking,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “The euro has been a bit of a disappointment for everyone.” Silver futures for March delivery fell 14.3 cents, or 0.9 percent, to $15.447 an ounce. This week, the metal gained 4.2 percent, halting a four-week slide. Platinum futures for April delivery dropped $8.20, or 0.5 percent, to $1,511.10 an ounce. Palladium futures for March delivery declined 80 cents, or 0.2 percent, to $418.15 an ounce. This week, platinum climbed 2.4 percent and palladium jumped 5 percent, ending three-week slumps. To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net

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